Accretive acquisition of Colorado-based clinic group bolsters Company’s US medical cannabis clinical roll-up strategy; adds 15,000 new patients
TORONTO, April 04, 2019 (GLOBE NEWSWIRE) — CB2 Insights (“CB2” or the “Company”) (CSE: CBII), a leading provider of predictive analytics tools, data-driven software and comprehensive services across the cannabis value chain, today made its second acquisition announcement in 2019 as it has acquired the assets of Colorado-based medical cannabis clinic group Rae of Sunshine Health Services (“ROSH”) LLC, operating as “Relaxed Clarity”, effective immediately. This follows the 2017 acquisition of Massachusetts-based Canna Care Docs, the largest multi-state cannabis clinic group in the US and the March 20, 2019 announcement of the agreement to acquire Arizona and Colorado-based MedEval LLC. CB2 continues to acquire clinics as part of its strategy to standardize the capture of clinically-validated patient efficacy data. This new acquisition will help expedite that process and will not only improve CB2’s financial metrics but advance the industry at-large.
Relaxed Clarity operates four clinics in Colorado including Denver, Colorado Springs, Pueblo and Broomfield. The group was established in 2009 and provides comprehensive medical cannabis evaluations and educational support to approximately 15,000 patients each year. In 2018, Relaxed Clarity recorded approximately US$1.1 million in revenue.
Terms of the acquisition
Under the terms of the acquisition, CB2 has acquired 100% of the assets of each of ROSH and its subsidiaries for a combination of cash and stock. Total consideration consisted of a cash payment of US$200,000 and issuance of 500,000 common shares of the Company. Share consideration was negotiated by the parties based on the Company’s most recent financing price, led by Merida Capital. Additionally, milestone incentive payments are in place relating to patient growth over the next 12 months and total up to US$100,000 in cash and up to a value of US$300,000 in common shares of the Company.
Subsequent share issuances will be based on the 30-day volume weighted average price of the Company’s shares prior to the date of issuance and all shares will be subject to a minimum hold period of four months plus 1 day from the date of each issuance.
Update on 2019 Revenue and Patient Trajectory
Based on 2018 revenue results of this acquisition, CB2 Insights is currently on track to achieve at least CA$12.2 million in revenue for 2019. We have an active pipeline of acquisition targets and along with organic growth within our existing operations, we anticipate achieving our stated 2019 revenue goal of more than CA$20 million, for year-over-year growth of more than 80% compared to 2018.
Prad Sekar, CEO, CB2 Insights
At the close of 2018, CB2 Insights was collecting clinically-validated evaluation data through its business units of approximately 65,000 patients annually. As a result of this announcement, combined with the pending acquisition of MedEval LLC, the Company projects its annualized patient count to increase to approximately 80,000 patient evaluations on an annualized basis.
About CB2 Insights
CB2 Insights has a mission to mainstream medical cannabis into traditional healthcare. We do so by gathering data and creating objective real-world evidence through our proprietary software and service brands. Using clinical management and data collection software at the point-of-care, CB2 Insights and its group of sub-brands has become a leading force behind bringing traditional healthcare protocols to the rapidly evolving global cannabis industry.
For more information please visit www.cb2insights.com.