TORONTO–(BUSINESS WIRE)–Halo Labs Inc. (“Halo” or the “Company“) (NEO: HALO, OTCQX: AGEEF, Germany: A9KN) today announced that, due to delays caused by the COVID-19 pandemic, the “Drop Dead Date” associated with the closings of the planned acquisitions related to the North Hollywood dispensary have been extended to May 31, 2020 from the original date of March 31, 2020. This includes both the acquisition of the retail management company, Crimson & Black (“C&B”), and the acquisition of the controlling interest in the dispensary applicant LKJ11 LLC (“LKJ”). Furthermore, the audit of the Los Angeles Department of Cannabis Regulations (“DCR”) application and licensing process, which was conducted by an independent auditor has been completed and the license issuance process may now continue. LKJ, a dispensary license applicant with a location in the heart of the NOHO district of North Hollywood, should now obtain its license in short order.
Further to the Company’s press releases dated February 28 and March 6, 2020 concerning Definitive Agreements to acquire the controlling interest in the North Hollywood dispensary applicant LKJ and the accompanying management company, C&B, Halo has agreed to extend the closing deadline to May 31, 2020. The extension will provide more time to finalize the Definitive Agreements during a time when everyday business interactions continue to experience delays due to recent COVID-19 pandemic. This includes the recent extension of federal-mandated social distancing guidelines which have been extended until April 31st as the federal, state, and local governments join forces to combat the virus.
Additionally, following a thorough review of the DCR application and licensing process, the independent audit found that the process was conducted in good faith and found no evidence of bias or unfairness. The Auditor found DCR’s ‘normalization process’ leveled the playing field, eliminated any unfair advantage, and the report recommended that the DCR continue awarding and giving final approvals to winning applicants. These results are favorable for Halo as the Company finalizes the acquisition of C&B, as well as its acquisition of controlling interest in LKJ, a winning applicant.
The initial application process was highly selective as only 100 licenses were issued from more than 800 applicants. Even though the COVID-19 pandemic has shuttered a majority of businesses, both the cannabis and the construction industry have been deemed critical businesses in Los Angeles during the pandemic, and therefore have permission to continue conducting business in ordinary course, subject to local and CDC guidelines. The Company expects that once the DCR continues with the awarding of licenses and LKJ receives its license, the build out of the dispensary and its opening will continue on schedule, with the Company targeting an opening in the second quarter of 2020.
The build out is expected to be one of North Hollywood´s largest retail dispensary locations, boasting nearly 4,000 square feet and significant onsite parking. Located in the heart of North Hollywood, the dispensary will be situated on Lankershim Blvd. and Hesby Ave., which are heavily transited streets with significant vehicle and pedestrian traffic.
Upon the NOHO dispensary’s opening, Halo expects to commence direct retail sales of its own branded and white-labeled cannabis products, in turn fueling LKJ’s sales and reducing starting inventory costs. Halo will leverage manufacturing in Southern California at Cathedral City and cultivation procurement, manufacturing, and distribution operations in Northern California to scale up its direct-to-dispensary business.
Katharyn Field, President of Halo Labs, states, “We are pleased with the outcome of the DCR audit report and believe this paves the way for the City of Los Angeles to allow the initial dispensary license recipients to build out and open as soon as possible. We still anticipate opening the North Hollywood dispensary by the end of June and launching home delivery in the surrounding area as well. Above all, Halo will implement appropriate measures to ensure that retail operations are mindful of any guidelines still recommended by state and local governments, as well as the CDC, to protect both customers and employees from COVID-19.”
Halo is a leading cannabis cultivation, manufacturing, and distribution company that grows and extracts and processes quality cannabis flower, oils, and concentrates and has sold over 5 million grams of oils and concentrates since inception. Additionally, Halo has continued to evolve its business through delivering value with its products and now via verticalization in key markets in the United States and Africa with planned expansion into European and Canadian markets. With a consumer-centric focus, Halo markets innovative, branded, and private label products across multiple product categories.
Recently, the Company entered into binding agreements to acquire a dispensary in Los Angeles, and Canmart Limited which holds wholesale distribution and special licenses allowing the import and distribution of cannabis based products for medicinal use (CBPM’s) in the United Kingdom. Halo is led by a strong, diverse management team with deep industry knowledge and blue-chip experience. The Company is currently operating in the United States in California, Oregon, and Nevada while having an international presence in Lesotho within a planned 205-hectare cultivation zone via Bophelo as well as planned importation and distribution in the United Kingdom via Canmart.
For further information regarding Halo, see Halo’s disclosure documents on SEDAR at www.sedar.com.
Cautionary Note Regarding Forward-Looking Information and Statements
This press release contains certain “forward-looking information” within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only Halo’s beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of Halo’s control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or may contain statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “will continue”, “will occur” or “will be achieved”. The forward-looking information and forward-looking statements contained herein includes, but is not limited to, the extension of Crimson and Black and NOHO dispensary acquisition date as well as favorable audit by the City of Los Angeles on the DCR.
By identifying such information and statements in this manner, Halo is alerting the reader that such information and statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results to be materially different from those expressed or implied by such information and statements. In addition, in connection with the forward-looking information and forward-looking statements contained in this press release, Halo has made certain assumptions. Although Halo believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements. The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and Halo does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws. All subsequent written and oral forward-looking information and statements attributable to Halo or persons acting on its behalf is expressly qualified in its entirety by this notice.