Halo Labs Inc (NEO:HALO) Establish Greater Distribution and Diversification in California
Halo Labs Inc (NEO:HALO) (OTCMKTS:AGEEF) (FRA:A9KN) has taken the first steps toward acquiring a 17.5% interest in Ukiah Ventures Inc (or UVI). This transaction will allow Halo to secure rent-free access to the Ukiah facilities for the first year of the relationship as well as a regular supply of cannabis biomass to process with right of first refusal (for three years – up to a 15,000 lbs. quota per month). It also offers biomass procurement, to produce cannabis oils and distillates more cheaply. Halo will also capture other value-added activities in the cannabis space, such as drying, trimming, packaging, freezing and storing. For those keeping count, Halo will exchange 5,940,000 of its own common shares and exchange them for 1,333,333 common shares of UVI, a cannabis distributor and processor.
For Halo, the most important aspect of the UVI transaction is the opportunity to establish a far greater distribution and diversification in California-especially, northern California, which is certainly one of the most important cannabis markets in the world. Indeed, UVI boasts both close relationships with biomass suppliers from farms at competitive prices (primarily in northern California) and distribution channels to processors in southern California.
Experienced cannabis entrepreneurs manage UVI’s 30,000 square foot processing and manufacturing facility in Ukiah, California. The facility has direct access to a major highway, facilitating sales logistics; moreover, thanks to the six-acres it controls, UVI has plenty of land available to meet the most ambitious plans for business growth.
Many cannabis companies will flourish, but others will not succeed. One of the key ingredients for success – quite literally – is the quality of the plant material, used to process the various derivatives, which will provide the ‘value-added’ earnings producing premium, investors will demand. In this respect, Halo’s expansion in California, particularly as far as the agricultural relationships are concerned, cannot be understated.
Given, the cannabis experience of California – apart from the unregulated market, the State has enjoyed a regulated medical cannabis market since 1996 – growers know how to recognize ‘good grass’ when they see it. California cannabis biomass suppliers such as UVI, therefore, understand the importance quality over quantity. By accessing this expertise, through (partial) ownership, Halo will not only benefit from having secure access to top shelf raw material, it will also benefit from the know-how of veteran growers, who understand how to avoid mediocre cannabis. The quality factor has become all the more important, as California has legalized edible cannabis products: the first cannabis café (in the United States) will have opened to the public on September 1, 2019, in West Hollywood to be more precise. The restaurant will offer CBD, THCs enhanced dishes and also allow patrons to smoke and dab during their meal.
This is a historic moment, not only for cannabis, but for the country as a whole. As pioneers in the end of the prohibition of cannabis, we are dedicated to the treatment of cannabis just like alcohol. The first step was to put it on sale. It is now about giving the public access to a safe communal space where cannabis can be consumed without stigma.
Arguably, California has the potential to make some of the highest quality organic cannabis in the world. The US State, moreover, represents the world’s largest market for cannabis. More importantly, it has become a giant laboratory, which the rest of the world is observing in order to adopt best practices. And Halo has found a way to play a protagonist role within it through UVI.
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Notice for Forward-Looking Information
Certain statements in this press release are forward-looking statements and are prospective in nature. Forward-looking statements are not based on historical facts, but rather on current expectations and projections about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. Such forward-looking information includes that HALO Labs Inc will be a big, successful company in the cannabis sector; that cannabis use and sales will grow and HALO’s sales along with it; HALO’s intended acquisition of various foreign companies and expansion into the US market; that extraction is and will continue to be a fast growing and profitable sector of the cannabis industry; that HALO will reach $48M in revenues in 2019; HALO’s plans to produce concentrates and sell them in various locations throughout the world; that HALO could be granted licenses to expand; and that it will be able to carry out its business plans.
Readers are cautioned to not place undue reliance on forward-looking information. Forward looking information is subject to a number of risks and uncertainties that may cause actual results or events to differ materially from those contemplated in the forward-looking information, and even if such actual results or events are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on HALO. Such risks and uncertainties include, among other things: that a regulatory approval that may be required for the intended acquisitions and subsequent sales are not obtained or are obtained subject to conditions that are not anticipated; growing competition for intended acquisitions in the cannabis industry; potential future competition in the markets HALO operates for sales; competitors may quickly enter the industry; general economic conditions in the US, Canada and globally; the inability to secure financing necessary to carry out its business plans; competition for, among other things, capital and skilled personnel; the possibility that government policies or laws may not permit legal cannabis sales or growth or that favorable laws in place may change; HALO not adequately protecting its intellectual property; interruption or failure of information technology systems; the cannabis market may not grow as expected; HALO’s technology may not achieve the expected results and its accomplishments may be limited; even if it is granted patents, it may not have success at licensing its technologies or sell its products at the rate expected; planned acquisitions and partnerships may not materialize because of inability to agree on terms with prospective partners or targets; HALO’s business plan also carries risk, including its ability to comply with all applicable governmental regulations in a highly regulated business; incubator risk investing in target companies or projects which have limited or no operating history and are engaged in activities currently considered illegal under US federal and foreign laws; and other regulatory risks relating to HALO’s business, financings and strategic acquisitions, including securities laws, trade rules, and foreign country regulation that is not the same as Canadian or US regulations.
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