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Icanic to Acquire California Extraction Company

LEEF provides bulk concentrates to many of the state’s largest brands.

I Stock 913581998

VANCOUVER, B.C. -- Icanic Brands Company Inc., a multi-state brand operator of premium cannabis brands in California and Nevada, is pleased to announce that the company has entered into a definitive agreement with LEEF Holdings Inc., a California based extractions company.

LEEF is one of the largest cannabis extraction companies in the state of California and is a leading provider of bulk concentrates to many of the largest brands in the state. It is led by an expert group of legacy operators with decades of experience in organic soil-based farming and sophisticated extraction practices. LEEF’s manufacturing capabilities include a 12,000-square-foot, state-of-the-art extraction and manufacturing facility with up to 45 tons of biomass throughput per month and up to 3,000 liters of distillate extraction capability per month.

Headquartered in Willits, California, LEEF’s core manufacturing competencies include ethanol extraction (Type 6 manufacturing license), hydrocarbon extraction (Type 7 manufacturing license), and solventless extraction. LEEF also has an edibles production line and is in the process of building out a 45,000-square-foot mid-stream processing facility, which will allow it to dry its own product and provide additional services including processing, distribution and delivery to its customers.

LEEF also recently received a 186.7 acre cultivation land use permit, which will make it the owner of one of the largest cannabis cultivation sites in California. The site sits on over 1,900 acres of prime California real estate.

Since inception, LEEF has experienced significant year over year growth with strong and consistent gross margins and positive cash flow. From 2019 to the end of 2021, LEEF experienced revenue growth exceeding 100%. With the build out of the cultivation site, LEEF will be able to provide consistency, quality and quantity to its customers and its’ margins are expected to increase substantially as it gains vertical efficiencies with its in-house supply chain.

In addition to its extraction and distribution capabilities, LEEF owns and operates the LEEF Organics, Heady, and Paleo Paw brands and currently operates and has an option to purchase the highly sought after Real Deal Resin brand. These brands will add to Icanic’s current brand portfolio which currently includes its award winning GanjaGold and Taylor’s brands. It is expected that LEEF’s expertise in manufacturing and supply chain management will allow for significant operating synergies on a go forward basis including reduced input costs and enhanced manufacturing efficiencies.

“Today represents a huge milestone for Icanic. Our ability to come together as one with an amazing company like LEEF will only further enhance our position in the market. Micah and the rest of the team have done an amazing job building one of the leaders in the California market and we couldn’t be prouder to call them our partners” said Brandon Kou, CEO of Icanic Brands. “This marriage will allow us to accomplish our collective goals quicker and I am proud to say that the combined teams have already been hard at work analyzing the synergies and identifying efficiencies allowing us to build towards a singular infrastructure.”

Micah Anderson, CEO of LEEF, commented, “I am incredibly excited to be taking LEEF into the next stage of its development and together with our new partners at Icanic. We look forward to continuing to build significant shareholder value for many years to come. It’s because of the relentless hard work of LEEF’s employees that we have found ourselves at what I believe is the starting point to the next chapter. I have been in the cannabis industry for many years and, along with the other founding partners of LEEF, have devoted our entire lives to building our company. Winning is the result of having the right people working together with the right vision and Icanic’s management team only strengthens the talents and relationships LEEF brings to the table. I look forward to working with the Icanic team to add tremendous value to the combined organization as it continues to expand and grow in the coming years.”

Under the terms of the agreement, the company will acquire all the issued and outstanding shares of common stock of LEEF, whereby LEEF will complete a statutory triangular merger under the Nevada Revised Statutes with a wholly-owned subsidiary of the company. The purchase price will be comprised of the closing purchase price and earn-out payments tied to achieving certain revenue targets following the completion of the acquisition.

The initial payment forming part of the purchase price will be equal to the higher of $120 million or two times the trailing 12-months revenue of LEEF for the period ended Sept. 30, 2021. The closing purchase price will be satisfied in full through the issuance of common shares of the company at an issue price per share equal to the 30-day volume-weighted average trading price of the Icanic Shares on the Canadian Securities Exchange for the period ending on the business day prior to closing.

The acquisition is anticipated to be completed during Q1 2022 and is subject to customary closing conditions, regulatory approvals and the approval of LEEF shareholders.

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