Sky’s the Limit for the Merger of 2 of Cannabis Industry’s Biggest Accessory Players
The merger of 2 of the cannabis industry’s biggest premium accessory companies, KushCo Holdings Inc. (OTCQX: KSHB) and Greenlane Holdings Inc. (NASDAQ: GNLN) , is on track to “take advantage of a cannabis industry that’s booming,” KushCo Founder, Chairman and CEO Nick Kovacevich told Benzinga.
KushCo is a premier provider of ancillary products and services to the legal cannabis and CBD industries, serving a diverse customer base consisting of leading multistate operators (MSOs), licensed producers and brands. The merger agreement, which Kovacevich said is still a month away, comes as the 2 companies strategically anticipate eventual national cannabis legalization. Currently, 19 states, Washington, D.C., and Guam have made recreational marijuana legal.
Kovacevich spoke exclusively to Benzinga about the merger and what’s ahead for the combined companies. The following are some of the highlights of the Benzinga video interview. You can watch the entire interview here.
Merger Update
“The vote is going extremely well, and people are fired up about this merger, including myself. We still have another month before our shareholders’ meeting, which is August 26, but we’re encouraging everybody to vote now. We’re getting a resoundingly positive response. Ninety-seven percent of the votes coming in so far are voting in favor of the merger so our shareholders are fired up, we’re fired up.
We’re ready to get this merger completed and move on to the next phase, which is going to be the hardest part of the merger and that’s the execution. But, we’re certainly up for the challenge. KushCo is asking its shareholders to vote for the transaction, and we need 51% to approve. Greenlane is doing the same. Greenlane shareholders should have already received proxy materials.
This is a historic merger and would bring together 2 of the longest-standing ancillary companies in the industry. Greenlane has over 15 years of experience, and KushCo has over a decade. We are coming together into one family with a global opportunity to take advantage of a cannabis industry that’s booming.
There’s no one out there really doing quite well as we are in the industry, and we think this is a rare and unique opportunity. We feel that the future is brighter than ever, especially as we look to effectuate this merger.”
Excited About the Future
“I’ll hit a couple of the highlights. No. 1, the companies are looking to get profitable very quickly. KushCo’s done a lot of work and plugged it into positive adjusted earnings before interest, taxes, depreciation and amortization territory for the 1st time in 3 years. A few quarters ago, Greenlane was on the same path. Together we’ll be able to pull off $15 to $20 million of cost, which really accelerates that path to profitability. We’re going to complement that with organic growth.
We’ve also got a great synergistic customer base. KushCo is working with a lot of the leading MSOs. In addition to their production, which is what KushCo uses to sell their products upstream, these MSOs also have retail stores downstream, which are perfect homes for the Greenlane product suite. So we look to use that cross-selling across both of our networks to really grow the revenue organically and to complement that with a nice acquisition strategy where we can use inorganic growth to continue to add revenue.
We’re super excited about the pipeline of acquisition in that what we have is a proforma company, and we can actually own a lot of these brands ourselves. It gives us a much higher margin profile, and it also gives us the opportunity to be much more profitable as a combined company and increase our value in the marketplace. Post close, we’ve been doing a lot of planning and a lot of preparing, and like I said, we’re really ready for the challenge.”
For more information on the pending merger between KushCo and Greenlane, visit www.greenlanekushcotogether.com.
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