“This additional investment by Johnson Brothers, through their Green Acre option agreement, is part of their ongoing commitment to our expansion efforts into the United States. Johnson Brothers is known for their operational expertise in the distribution of beverage alcohol in the United States," said Joel Toguri, Chief Executive Officer of Humble. "We are ahead of schedule in executing our growth strategy, which includes enhancing our sales capabilities and forging stronger relationships with our brand and retail partners, such as Cookies. As our business evolves and expands, we focus on sustainable profit generation and positive cash flow to deliver long-term shareholder value.”
"Johnson Brothers is committed to the future of Humble & Fume and its expansion strategy of cannabis distribution operations in the U.S. states where it's allowed," said Mark Hubler, CEO and President of Johnson Brothers. “Securing a long-term distribution deal with the industry’s leading brand Cookies is proof of their ability to build meaningful relationships with top cannabis brands and to build long-term value in the United States.”
Humble brings an integrated approach to the sales and distribution market in the California cannabis market. California is currently one of the largest adult-use markets globally, worth approximately US$4.4 billion and expected to double over the next 10 years1. With over 6,000 cultivators and over 700 retailers, Humble believes that cannabis brands are looking for new and innovative ways to support ambitious sales targets and build strong retail relationships and brand awareness directly with consumers2.
As a result of the US$6 million investment described above, a further agreement was entered into among Humble, Green Acre, and Humble’s primary lender (the “Lender”) who recently provided Humble a $2 million secured credit facility (as announced on September 9, 2022). The parties agreed that, in the event of a default by Humble of its obligations under the credit facility, Green Acre would have the option to acquire all of Humble’s interest in the JV and the Lender would release its security in that interest in exchange for payment in full by Green Acre, on behalf Humble, of all amounts owing under the credit facility. In addition, in that circumstance, Green Acre would also tender back to Humble all shares of Humble owned by Green Acre.
1 Source: BDS Analytics
2 Source: Bureau of Cannabis Control
Humble & Fume Inc. is a leading North American distributor of cannabis and cannabis accessories, supported by a customer-centric sales team and a strong fulfillment infrastructure. As the only fully integrated cannabis distribution solution, Humble bridges the gap for retailers, licensed cannabis producers, multi-state operators, and cannabis consumers to maximize sales penetration, and increase financial performance. With over 20 years of North American operating experience, Humble has cultivated extensive vendor and customer relationships, distributing premium cannabis consumables and consumption devices.
Graham Meneray, CFO
Humble and Fume Inc.
Johnson Brothers Liquor Company is a family-owned wine, spirits, and beer distributor with headquarters in St. Paul, Minnesota. The company has been servicing its customers throughout the United States since 1953. To learn more about their story, services, and locations, please visit www.johnsonbrothers.com.
This news release contains "forward-looking information" within the meaning of applicable securities laws relating to, the Company’s assessment of the cannabis market in the United States generally and specifically, the state of California, and the expected results for brand partners of the Company. Any such forward-looking statements may be identified by words such as "expects", "anticipates", "intends", "contemplates", "believes", "projects", "plans" and similar expressions. Readers are cautioned not to place undue reliance on forward-looking statements. Statements about, among other things, the potential for Johnson Brothers, through Green Acre, to increase its ownership percentage in the JV, the potential impact on brands that engage Humble for their distribution and / or sales agency and the future of the cannabis industry in California and across the United States, including the anticipated ongoing consumer demand, are all forward-looking information. These statements should not be read as guarantees of future performance or results. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance, or achievements to be materially different from those implied by such statements. Although such statements are based on management's reasonable assumptions, there can be no assurance that such forward-looking statements will occur as described herein. The Company assumes no responsibility to update or revise forward-looking information to reflect new events or circumstances or actual results unless required by applicable law. Readers are encouraged to refer to the Company’s disclosure available on its SEDAR profile (at www.sedar.com) for information as to the risks and other factors which may effect the Company’s business objectives and strategic plans.