The cannabis merge continues as The Parent Company and Gold Flora announce deal

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The two companies are combining forces to give them a competitive edge in the market

The mergers and acquisitions (M&A) market appears to remain steady in the cannabis sector this year. The main reasons for this movement are economic, gaining a greater competitive advantage, and even defensive strategies driven by changes in customer demands or competitor actions. The most recent example is evidenced by the Parent Company and Gold Flora, who have decided to join forces to develop a leading vertically integrated operator in the world’s largest marijuana market.

The Parent Company, also known as TPCO Holding Corp., is a leading California-based consumer-focused marijuana firm. Gold Flora, also based in the Golden State, is a leading vertically integrated cannabis company. Both announced yesterday that they have entered into a definitive agreement to merge their businesses, combining their shares.

The merger agreement provides that the holders of Gold Flora will own approximately 51%, and the shareholders of Parent will own approximately 49% of the outstanding common stock of the combined company. This will be on a pro forma basis upon consummation of the business combination in its entirety.

The companies have announced several benefits from this strategic move. First and foremost, they seek to achieve greater size and scale to become a leading operator in the world’s largest cannabis market. They also look to establish a vertically integrated platform strongly positioned to achieve financial and operational efficiencies.

The combined company expects significant synergies to drive margin improvement and improve profitability across all verticals. This will result in the development of an improved financial profile with a strong balance sheet.

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