Not for Distribution to U.S. Newswire Servicers or For Dissemination in the United States
All figures in USD and per BDS Analytics unless stated otherwise
Toronto, Ontario – September 7, 2020 – Halo Labs Inc. (“Halo” or the “Company”) (NEO: HALO, OTCQX: AGEEF, Germany: A9KN) and Feel Better, LLC dba FlowerShop* (“FlowerShop*”) are excited to announce signing of their partnership. Halo and FlowerShop* have executed a licensing, manufacturing, and distribution agreement for FlowerShop* branded products. Halo has signed a Membership Interest Purchase Agreement to acquire a 25% membership interest in FlowerShop*, a cannabis lifestyle and conceptual wellness brand, in which G-Eazy is a partner and key member of Flowershop*. Halo’s acquisition of the membership interest is expected to close this week.
G-Eazy is an American rapper and producer from Oakland, CA., with multi-platinum selling hit songs, billions of views and streams, and sold-out world tours. Active with investments and philanthropy work in his home state of California and beyond, he comments, “I have seen first-hand the power of the plant, witnessing cannabis change my mother’s life in a very positive way. I was instantly drawn to FlowerShop* and its mission to help people feel better; and knew I wanted to take on an active role as a partner. My hope is, in the midst of this pandemic and beyond, FlowerShop* will be an essential business that stimulates the economy, providing comfort and joy to people through the products and experiences we create and bring to market.”
Combining FlowerShop*’s innovative product and marketing approach with Halo’s international, vertical cannabis industry expertise, the two companies will collaborate to create a globally-recognized brand, offering a full proprietary line of cannabis products, including flower strains, novel concentrates, natural edibles and more –with paramount focus on the highest-quality raw ingredients, expert manufacturing, and novel, sustainable packaging design. The Flower, Pre-Rolls, Edibles, and Vapes are expected to be launched in California in the fourth quarter of this year and Oregon early next year – targeting the large and rapidly expanding consumer base looking for premium cannabis products that match their lifestyle, values, and taste. While initial launch will be focused in California and Oregon, domestic and international licensing agreements with other cannabis companies are expected to follow.
Co-Founder Manager and Member of Flowershop*, Gabriel Garcia states, “Our multi-disciplinary and deliberate design efforts allow us to expand the offering, reach, and impact our products can make on the world – all promoting mental and physical well-being through Sensory-Care™.” Building the product assortment, FlowerShop* will not only offer cannabis, but a full line of aromatherapy products, including candles, incense, and functional fragrances. With executive experience in fashion and retail, the partners also envision a full line of multi-functional home goods–from clothing to home wares. With world-class product design and marketing experience, combined with G-Eazy’s reach and creative acumen, FlowerShop* plans to offer inventive digital and physical experiences that happen in the intersections of music/art, fashion, food, and cannabis culture.
Isaac Muwaswes, Co-founder and Managing Member of Flowershop*, who developed products and led teams at Oracle and Twitter, praises the partnership and comments, “Tapping into Halo’s vertical integration–the scale, efficiency, and industry/operational expertise–will allow our brand to reach the cannabis enthusiasts with the top-shelf offerings, while controlling the product and guiding the consumer journey from seed to sale and beyond. Thankfully, over the last year and a half, we have developed a strong bond with Halo’s leadership team; and their diversity and innovation, combined with their trust in our vision, make them the perfect partner.”
Kiran Sidhu, CEO and Co-Founder of Halo notes the timeliness of the partnership in meeting the current needs of the world: “The time to bring FlowerShop* and its mission to the market has never been more vital. Their products, devices and packaging are unique and should have good sell thru. Flowershop* complements our product mix in Oregon and California by adding a top shelf line that appeals to higher income cannabis consumers. We look forward to working with them to create products and experiences that support the vision of a more healthy and joyful world.”
The transaction is expected to close this week and Halo has committed to acquired 25% of the total outstanding membership interests of FlowerShop* in exchange for 15,447,992 Halo common shares (the “Halo Shares“). The Halo Shares are subject to certain contractual restrictions on resale and Halo has also agreed that Halo Shares may be repurchased by Halo for cancellation at fair market value in certain circumstances to support FlowerShop*’s working capital needs.
Halo, FlowerShop*, and Halo IP Holdings, Inc., a wholly-owned subsidiary of Halo (“Halo IP”), also entered into an Intellectual Property License Agreement (the “License Agreement”) and FlowerShop* entered into an Endorsement Agreement with G-Eazy, LLC (the “G-Eazy Agreement”). Pursuant to the License Agreement, Halo will license, manufacture, and distribute FlowerShop*-branded marijuana products in Oregon, California, Nevada, and intends to do the same Internationally in exchange for a combination of royalties, fixed fees, and warrants to purchase Halo common shares. Pursuant to the G-Eazy Agreement, G-Eazy will promote FlowerShop*-branded marijuana products and FlowerShop* will be entitled to use G-Eazy’s name, voice, and likeness to sell FlowerShop*-branded marijuana products. In addition, Flowershop* has entered into a consulting agreement with Halo pursuant to which Flowershop* is providing services in respect of a rebranding of Halo’s Hush™ line of cannabis products, including the development of new innovative packaging and designs that are expected to be released later this year.
In connection with the License Agreement, Halo will issue 1,500,000 common share purchase warrants (the “Warrants”) to FlowerShop* exercisable at a price of CDN$0.135. The Warrants will vest quarterly over twelve months and expire two years from the issue date.
If the License Agreement is terminated (other than as a result of a breach by Halo or Halo IP) or if the G-Eazy Agreement is terminated or breached by G-Eazy LLC prior to the completion of its initial two-year term, all unvested Warrants will immediately expire. Additionally, if the G-Eazy Agreement is terminated or breached by G-Eazy LLC prior to the completion of its initial two-year term, FlowerShop* will be obligated to issue up to an additional 20% of its membership interests to Halo.
Closing remains subject to the satisfaction or waiver of all closing conditions, including the receipt of all necessary approvals, including the approval of the NEO Exchange Inc.
FlowerShop* is a Sensory-Care™ brand, innovating in the wellness, cannabis, and lifestyle categories. Co-founders Isaac Muwaswes and Gabriel Garcia explain Sensory-Care™ as a progressive take on wellness–creating products, experiences, content, and more–all designed to enhance your senses. In addition to being part of G-Eazy’s creative team, they bring a wealth of knowledge and experience from a diverse set of industries, including tech and marketing, where Isaac led brand development at Twitter; to fashion and retail, where Gabriel co-created the international cult-favorite label, Brooklyn Circus, in addition to working with Puma and Adidas.
Together, Isaac and Gabriel saw a void in the wellness, cannabis, and lifestyle industries. They embarked on a mission to develop a “Feel Better™ Company,” a joyful brand experience at every level–from purchase to consumption–that exceeds the expectations of design-driven consumers who curate every aspect of their lives. By creating the first digitally-native, direct-to-consumer platform in the cannabis space, FlowerShop* will positively disrupt the market with original content, products, and experiences, focused on sustainability and multi-functional use — helping the world to FEEL BETTER™, and ultimately encouraging acts of giving, spontaneity, and love.
Halo is a leading, vertically-integrated cannabis company that cultivates, extracts, manufactures and distributes quality cannabis flower, oils, and concentrates, and has sold approximately six million grams of oils and concentrates since inception. Halo continues to scale efficiently, partnering with trustworthy leaders in the industry, who value their operational expertise in bringing top-tier products to market. Current growth includes expansion in key markets in the United States and Africa, with planned geographic expansion into U.K. and Canadian markets. With a consumer-centric focus, Halo markets value-driven, branded, and private-label products across multiple product categories.
Recently, the Company acquired a dispensary permit in Los Angeles, and a thirty-thousand square foot cannabis processing and wholesale facility in Ukiah, California. The Company plans to acquire three KushBar™ branded dispensaries in Alberta Canada, and Canmart Limited, a company that 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 and innovative management team, with deep industry knowledge and blue-chip experience. The Company is currently operating in the United States in California, Oregon, and Nevada. Internationally, the Company is currently cultivating cannabis at Bophelo Bioscience & Wellness (Pty) Ltd, in Lesotho under a 200-hectare license and is planning importation and distribution of CBPM’s into the United Kingdom via Canmart.
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 include, but are not limited to, statements regarding the acquisition of an equity interest in FlowerShop*, the collaboration with G-Eazy and the licensing, manufacturing, and distribution of FlowerShop* branded products.
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. Among others, the key factors that could cause actual results to differ materially from those projected in the forward-looking information and statements are the following: delays in obtaining required approvals from regulators, changes in general economic, business and political conditions, including changes in the financial markets; and the other risks disclosed in the Company’s annual information form dated April 16, 2020 and available on the Company’s profile at www.sedar.com. Should one or more of these risks, uncertainties or other factors materialize, or should assumptions underlying the forward-looking information or statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected.
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.