Halo closes acquisition of California cannabis company

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The deal is finally secured after being announced last November

A new merger is soon to happen and details about the deal’s closure have just been shared. Halo Labs Inc. has announced that the agreement to acquire Mendo Distribution and Transportation, LLC out of California, first announced on November 25, 2019, has been completed. The transaction was reported for a total of $4.95 million that will be paid in exchange for Halo common shares, so it will preserve the already strong position regarding cash the company has. This deal brings benefits for both parties, the gross revenues reported for MDT during 2019 were $5.75 million.

This vertical integration brings some interesting features to Halo starting with the obvious increase in gross margin revenue in all the operations currently in California. The distribution capacity for Halo will grow enormously and the overall distribution cost will be impacted positively, which could potentially result in a positive impact to the manufacturing and distribution tax rate paid.

MDT is based in Ukiah, California and has facilities covering 4,500 square feet. It has permits for 11 types of cannabis distribution licenses and, on-site, a Type N license is also managed. Galactic Chocolates LLC, which owns that license, has also offered to purchase an equity interest in exchange for Halo common shares.

The co-founder and CEO of Halo, Kiran Sidhu, commented, “Halo is executing on its California verticalization strategy by obtaining this operational and revenue-generating distribution license, large scale facility, and option to purchase an existing edibles business to expand Halo’s portfolio.” He continued, “We expect MDT will be a meaningful contributor to Halo’s growth in 2020 and beyond, as we build on our position as one of California’s leading cannabis companies.”