Red White & Bloom Brands Plans Share-Exchange Acquisition of Aleafia Health

LOS ANGELES– Multistate operator Red White & Bloom Brands (RWB) has announced its intention to acquire financially troubled Canadian cannabis operator Aleafia Health in a share-exchange agreement. The proposed deal comes shortly after Aleafia announced a strategic review following a breach of secured loan terms.

Under the agreement, RWB will provide Aleafia with a $17.5 million credit facility as part of the deal, while also planning to sign a $30 million credit facility for its own use. Each Aleafia common share will be exchanged for 0.35 RWB shares, effectively giving Red White & Bloom shareholders approximately 76% ownership of the combined company.

RWB’s Chief Financial Officer, Eddie Mattei, highlighted the potential benefits of the acquisition, stating that it would establish a distribution platform for RWB and its premium Platinum brand in the Canadian market. Additionally, it would provide Aleafia with access to the larger U.S. market through RWB’s distribution and retail channels, allowing both companies to leverage their respective strengths.

Aleafia’s Chief Financial Officer, Matt Sale, expressed confidence in the deal, emphasizing that it would help recapitalize Aleafia’s balance sheet and provide shareholders with exposure to the larger market capitalization and U.S. recreational and medical cannabis markets.

The completion of the acquisition is contingent upon court, regulatory, stock exchange, and shareholder approval. It is anticipated to close by the end of October. Both RWB and Aleafia are headquartered in Ontario, with RWB operating in various U.S. markets, including Arizona, California, Florida, Illinois, Massachusetts, and Michigan.

Shares of Aleafia trade as “AH” on the Toronto Stock Exchange, while RWB shares trade as “RWB” on the Canadian Securities Exchange and as “RWBYF” on U.S. over-the-counter markets.