CALGARY, ALBERTA and SANTA ROSA, CALIFORNIA – April 1, 2019 – Gabriella’s Kitchen Inc. (“GABY” or the “Company”) (CSE: GABY), an innovative and leading-edge cannabis wellness company, is pleased to announce the completion of its acquisition of all of the issued and outstanding shares of Sonoma Pacific Distribution (“Sonoma Pac”). The company announced the entering into of a Letter of Intent, on October 23, 2018. Sonoma Pac is California’s premier, independently owned cannabis distribution company, with an expansive distribution reach across the state of California, the world’s most important cannabis market. Sonoma Pac was issued a permanent cannabis distribution license by the California Bureau of Cannabis Control and the County of Santa Rosa on March 14, 2019
“With the support of GABY and its executive team and relying on GABY’s infrastructure, Sonoma Pac realized a record breaking first quarter. I estimate that for the quarter ending March 31, 2019, we generated revenue from the sale of our proprietary products of over CDN$8 Million” stated Aaron Browe, President of Sonoma Pac. “That number represents a whopping 1200% increase over same quarter last year” he concluded.
“Our relationship with Sonoma Pac over the past several months has shown us how we can successfully use our infrastructure to accelerate bringing our brands to market” said Margot Micallef, Founder & CEO of GABY. “With our extensive experience in consumer packaged goods we identified early that to be successful as a CPG company in the cannabis space we needed two things: quality and speed to market. We acquired our manufacturing license and facility last October to ensure we could control the quality of our products and now with the completion of the acquisition of Sonoma Pac we have the resources to bring our proprietary brands to market quickly and efficiently”, she continued. “Even though we own a manufacturing license and now a distribution license it is important to note we are neither a manufacturing company nor a distribution company. Rather, we are a CPG company operating in the cannabis space. Our manufacturing and distribution licenses exist only to support bringing our proprietary brands to market. In other words, we are a house of brands!” she concluded.
With the completion of this acquisition, Aaron Browe becomes the Executive Vice-President, and General Manager of GABY’s cannabis operations. In this role he will supervise a team with over one hundred years’ experience in the cannabis industry, who enjoy deep connections with appellation farmers growing some of the best cannabis in the Sonoma Valley, and with many of the finest dispensaries in California. He also indirectly supervises a team of sales people, strategically positioned throughout the state, who will sell proprietary and third-party licensed products into the licensed dispensary channel in California, and also CBD infused products into the mainstream independent, natural and organic channel in California. Aaron will report directly to Jamie Fay, President and Chief Operating Officer of GABY.
“While the operational synergies we will realize with GABY significantly improves Sonoma Pac’s growth trajectory, I also believe that the completion of this acquisition will be equally impactful for the entire California market.” Mr. Browe continued, “GABY’s foundation and expertise in innovation, brand development, and consumer satisfaction, combined with Sonoma Pac’s ability to reach consumers, will reshape the California cannabis landscape as we currently know it.”
Under the Agreement, the Sonoma shareholders will receive approximately [17,000,000] common shares in GABY priced at $.4148 per share. The number of shares to be issued are equal to 1.0x the verifiable licensed revenue of Sonoma for the fiscal year ended December 31, 2018 (“2018 Revenue”). The Sonoma shareholders will be further entitled to an earn-out equal to 0.35x the difference between the 2018 Revenue and the verifiable licensed revenue of Sonoma realized as at December 31, 2019. The earn-out will be paid in additional common shares in GABY at a price calculated as at the Company’s VWAP for the 20-day period ending on the day following the public release of the consolidated Sonoma and GABY fiscal 2019 year-end financial statements. All of the shares issued pursuant to this transaction are subject to a three year escrow (the “Escrow”).
Pursuant to the terms of the Escrow, 15% of the shares in escrow are released every 6 months.
ABOUT GABRIELLA’S KITCHEN INC.
GABY is a US-focused, consumer packaged goods company operating in the cannabis industry. GABY holds a manufacturing and a distribution license issued by the California Bureau of Cannabis Control. With these licenses, its existing infrastructure of major retailers and an extensive broker and distribution network in the mainstream channel, GABY is positioned to bring its proprietary brands to market in both the licensed and mainstream market.
Margot and her sister Gabriella co-founded GABY after Gabriella received a dire cancer diagnosis which spurred the sisters to prolong Gabriella’s life through a holistic approach to health. Today, GABY is a wellness company with a diverse range of products that use cannabis and hemp derived CBD to address a variety of dietary and health concerns. Although Gabriella ultimately passed away from her illness, she lived exponentially longer than doctors predicted. Her memory and passion live on through GABY’s mission: to empower people to live healthy lives without compromise.
To learn more, please visit the Company’s website at www.gabyinc.com.
Further information:
For investment inquiries, please contact Margot Micallef, Founder & CEO or Investor Relations at IR@gabriellas-kitchen.com or (800) 674-2239.
For media inquiries, please contact Lana Rogers, Public Relations Consultant, at or (403) 519- 7959.
Disclaimer and Forward-Looking Information
The Canadian Securities Exchange does not accept responsibility for the adequacy or accuracy of this release. Certain information set forth in this news release may contain forward-looking statements that involve substantial known and unknown risks and uncertainties, certain of which are beyond the control of Gabriella’s Kitchen Inc. Forward-looking statements are frequently characterized by words such as “plan”, “continue”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate”, “may”, “will”, “potential”, “proposed” and other similar words, or statements that certain events or conditions “may” or “will” occur. These statements are only predictions. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Forward looking statements include, but are not limited to, the anticipated closing of the Sonoma Acquisition, the anticipated closing of other accretive acquisitions in 2019, the anticipated hiring of a qualified President and COO in a timely manner, the Company’s ability to raise funding to achieve its objectives in 2019 and the anticipated availability of the Company’s Infused Products. The Company assumes no obligation to update forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
TOP is a wholly owned subsidiary of GABY. TOP owns cannabis license in California. Cannabis is legal in the State of California however cannabis remains illegal under United States (“U.S.”) federal laws. The U.S. Department of Justice issued guidance in 2013 indicating that it will focus on certain enforcement priorities, outside of which it will generally not enforce federal prohibitions on cannabis in U.S. states that have authorized this conduct so long as the U.S. state has implemented a strong and effective regulatory program. This federal guidance is subject to change, rescission or alteration by other federal government policy pronouncements at any time. TOP’s business is conducted in a manner consistent with the State law of California and is in compliance with regulatory and licensing requirements applicable in the State of California. However, the readers should be aware that change in federal guidance on enforcement actions could adversely affect TOP’s ability to access private and public capital required in order to support continuing operations and its ability to operate in the U.S.
Neither the Canadian Securities Exchange nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of this release.
