Halo is a vertically integrated cannabis company with operations in cultivation, extraction, manufacturing and retail. The company recently executed definitive agreements to acquire the Pistil Point Indoor Facility in Oregon from Harvest Health & Recreation.
The halo collective has executed definitive agreements to acquire the Pistil Point Indoor Facility and related licenses in Oregon.
Halo Collective Inc. (“Halo” or the “Company”) (NEO: HALO) (OTCQX: HCANF) (Germany: A9KN) announced today that it has signed definitive agreements to acquire Food Concepts LLC, the master tenant of a 55,000 square foot indoor cannabis cultivation, processing, and wholesaling facility in Portland, Oregon, known as Pistil Point (the “FC Acquisiton”), as well as the related licenses issued by the state Following the filing of articles of merger with the Oregon Secretary of State, the FC Acquisition is anticipated to complete within the next week. The OLCC must approve the Pistil Point Acquisition, which is scheduled to conclude in early 2022. When completed, this acquisition would make Halo one of Oregon’s biggest indoor producers, adding to the company’s existing 11 acres of owned and contracted outdoor and greenhouse production.
Kiran Sidhu, CEO and Founder of Halo Collective, said, “Halo was established in Oregon, and we think it will be the market of the future as federal legalization approaches, with no cultivation taxes, low municipal taxes, plentiful labor, and cheaper water and electricity costs than most other states. We think that by establishing a major campus in Portland, we will be able to accelerate the trajectory of our market leadership in Oregon. We now have a triple play in Oregon, with indoor, greenhouse, and outdoor cannabis production, and we want to expand our capacity to become one of the state’s largest indoor producers.”
The Pistil Point Transaction’s Highlights
-
Adds a revenue and cash-generating subsidiary to Halo’s overall leadership in Oregon.
-
Builds a huge distribution center that can cover 70% of the state’s population in under an hour.
-
Allows for better price points, greater profits, and year-round flower production by bringing indoor flower manufacturing inside.
-
Allows you to boost your indoor blooming output from 200 to 500 lights (a 250 percent production increase).
-
Allows Halo to shift a large part of completed products assembly to Portland, allowing for just-in-time manufacturing while also boosting bulk capacity in Medford and decreasing inventory days on hand overall.
-
Allows Halo to establish Oregon’s biggest wholesale cash-and-carry showroom, with goods from over 30 farms and 12 major brands representing over 100 different SKUs.
-
Brings in a competent management team to carry out this growth strategy under Sid Gupta’s innovative leadership.
Pistil Point’s manufacturing facility is presently selling high-quality indoor grown flower and trim for $1,865 per pound (outside pricing $1,094 per pound1). Pistil Point reported unaudited sales of $889,000 and EBITDA of $255,000 during April to June 2021. 2 The last three months have shown an increasing trend. Before the execution of plans to expand up the plant to optimize output, management expects to significantly exceed unaudited total revenues of about $1.373 million in 2020. Halo will continue to cultivate the facility’s exceptional strains, which have tested as high as 30% TCH and helped Pistil Point establish itself as one of Oregon’s top flower growers.
Halo intends to expand the new facility’s manufacturing, processing, and distribution activities significantly during the following year. Since April 20, 2021, the facility has generated about $300,000 in revenue and $100,000 in free cash flow each month, and the expansion is anticipated to improve these figures by up to 250 percent in a year.
Furthermore, Halo intends to create a new central distribution hub by combining its existing distribution facilities in Medford and Eugene, Oregon, into the new facility in Portland, which is within a 60-mile radius of 70% of the state’s population4. The majority of dispensaries in the state will see a substantial reduction in delivery time as a result of this change. As Halo’s market share in Oregon continues to increase, the company plans to move its final assembly operations from Medford to Portland, doubling the company’s total manufacturing capacity. Production in Portland is expected to allow additional white label and bespoke manufacturing business with Halo’s dispensary partners, resulting in increased potential sales inside the state.
In addition, manufacturing and processing facilities will be upgraded, and distribution will be relocated to Portland. Halo plans to open Oregon’s first wholesale business-to-business, cash-and-carry showrooms for bulk and finished goods, which will stock all 12 brands Halo currently distributes in the state as well as a large selection of white label products, including but not limited to Flower (flower, pre-rolls, and canagars), Concentrates (shatters, resins, hash, and hash rosins), Vape Pens (cannabis-derived, and hash ros
“With Halo’s purchase of key Pistil assets, we now have access to Oregon’s extremely attractive indoor flower and pre-roll sectors, which have the highest price point, quickest growth, and best margins in the flower category,” said Dustin Jessop, Halo’s CRO and Winberry’s Founder. “We want to increase the capacity of this system from 200 to 500 blooming lights. This purchase will expand our number-one wholesale presence in Oregon, allowing us to serve the overwhelming majority of the market on the same day. We want to increase our total manufacturing capacity and open Oregon’s first cash and carry showroom. We want to replicate the first showroom in Eugene, Bend, and Medford once it is finished. We’re delighted to have Sid join the Halo family, and we’re looking forward to working with him.”
Pistil Point’s founder, Sid Gupta, went on to say, “Halo was the ideal option to purchase our Oregon business when I chose to concentrate on the East Coast recreational markets. Halo is a world-class organization that has rapidly established itself as Oregon’s biggest. I’m thrilled to be a member of the Halo team. I’m excited to collaborate with Halo in Oregon and beyond.”
