The Greenrose Holding Company Completes Asset Purchase of True Harvest, LLC

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– True Harvest Expands Greenrose Footprint in Arizona and Establishes Strong Growing Presence in the Southwest –

– Greenrose Provides Revised 2022 Outlook for True Harvest and Theraplant –

The Greenrose Holding Company Inc. (OTC: GNRS, GNRSW) (“Greenrose” or the “Company”) announced that it has completed its previously announced acquisition of the assets of Arizona-based True Harvest, LLC.

Pursuant to the acquisition, Greenrose paid consideration of $57.6 million at closing, consisting of $12.5 million in cash, $23.0 million in the form of a convertible note, $4.6 million in debt assumed and $17.5 million in common stock of the company. Subject to True Harvest reaching a certain price per pound of cannabis flower relative to total flower production within 36 months of the closing of the transaction, Greenrose will pay additional consideration of up to $35.0 million in the form a price supplement, payable in shares of ordinary shares of the Company.

“The completion of our purchase of assets from True Harvest expands Greenrose’s footprint in the Southwest and demonstrates the continued execution of our growth strategy,” said Mickey Harley, CEO and Director of Greenrose. “We look forward to working with the talented cultivation team at True Harvest to continue to grow our business around high quality flowers. With our strong cultivation footprint in Arizona and Connecticut, we believe our platform is well positioned to seize the growth opportunities presented by these new and emerging recreational markets. I am proud of the progress we have made to date, and we will work to further expand our platform and achieve our strategic goals in 2022.”

Greenrose has completed its business combination with the acquisition of the Connecticut-based company Theraplant, LLC , November 26, 2021. The company revised its 2022 outlook for True Harvest and Theraplant to reflect an expected fourth quarter 2022 start to recreational cannabis sales in Connecticut. Together, True Harvest and Theraplant are expected to generate between $120 million and $140 million in full-year 2022 revenue, 2022 net income of between $8 million and $14 million, and 2022 Adjusted EBITDA of between $75 million and $85 million. dollars.

Advisors

Gateway Group acts as communications advisor for Greenrose. Tarter Krinsky & Drogin LLP served as corporate, mergers and acquisitions and securities counsel for Greenrose, while Feuerstein Kulick LLP served as regulatory and debt counsel. Snell & Wilmer LLP acted as corporate, mergers and acquisitions, and securities counsel for True Harvest, LLC.

About Greenrose Holding Company Inc.

The Greenrose Holding Company Inc. intends to become a multi-state cultivator and producer of cannabis brands and products. Greenrose is driven by cultivation, knowing that being a leader in the cannabis industry requires starting with an exceptional flower derived from unique genetics and evolutionary growing methods. Greenrose aims to be a vertically integrated company that seeks scale and horizontal consolidation. For more information, please visit greenroseholdings.com .

Forward-looking statements

Certain statements made in this press release are “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. When used in this press release, the words “estimates “, “projected,” “expects”, “anticipates”, “plans”, “plans”, “intends”, “believes”, “seeks”, “may”, “will”, ” should”, “future”, “proposes” and variations of these similar words or expressions (or negative versions of these words or expressions) are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are beyond Greenrose’s control. or its target companies, which could cause actual results or results to differ materially from those referred to in the forward-looking statements. Important factors, among others, that may affect actual results or results include:

  • the liquidity of Greenrose shares; costs related to proposed business combinations;
  • Greenrose’s ability to manage growth; Greenrose’s ability to identify and integrate other future acquisitions;
  • rising costs negatively affecting Greenrose’s profitability;
  • competition in the legal cannabis industry;
  • adverse changes to the legal environment for the cannabis industry; and general economic and market conditions affecting demand for Greenrose’s products and services;
  • failure to realize the anticipated benefits of recently completed and future acquisitions, including delays in the completion of any future acquisitions or the difficulty or costs associated with integrating the businesses of Greenrose, Theraplant and True Harvest;
  • prevailing prices for cannabis products in the markets in which Greenrose operates;
  • new regulations or pending changes (and the timing of such changes) in applicable regulations in the states of Connecticut and Arizona where Theraplant’s and True Harvest’s businesses operate, respectively;
  • the effects of competition on Greenrose’s business; and
  • the factors discussed in Greenrose’s proxy statement on Schedule 14A filed on October 5, 2021 under the heading “Risk Factors” and other Greenrose documents filed or to be filed with the SEC.

If the risks materialize or the assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that neither Greenrose nor True Harvest is currently aware of or that Greenrose and True Harvest currently believe to be immaterial which could also cause actual results to differ materially from those contained in the forward-looking statements.

In addition, forward-looking statements reflect Greenrose’s expectations, plans or forecasts regarding future events and beliefs as of the date hereof. Greenrose anticipates that subsequent events and developments will cause its assessments to change. However, while Greenrose may choose to update these forward-looking statements at some point in the future, Greenrose specifically disclaims any obligation to do so. These forward-looking statements should not be taken to represent Greenrose’s assessments as of any date subsequent to the date hereof. Accordingly, readers should not place undue reliance on any projections or other forward-looking statements or data contained herein.

Contact with Investor Relations:
Investor Relations Gateway
Cody Slach or Jackie Keshner
(949) 574-3860
GNRS@gatewayir.com

Contact Greenrose:
Daniel Harley
Executive Vice President, Business Development
(516) 307-0383
ir@greenroseholdings.com

Greenrose Holding Inc.
Range of projections 2022
(Amounts in thousands of US dollars)
Low end Top of the line
Revenue net of discounts (1) $ 120,000 $ 140,000
Net profit (loss): $ 8,371 $ 14,661
Provision for income taxes (2) 22,260 25,970
Interest expense (3) 27,823 27,823
Depreciation and amortization (4) 16,546 16,546
EBITDA (5) $ 75,000 $ 85,000
(1) Revenue estimates assume Connecticut recreation begins in the fourth quarter with increased purchases at the end of the third quarter. Current revenue estimates reflect the recently closed acquisitions of Theraplant and True Harvest. We currently estimate that approximately $60 million in revenue will be attributed to implementing full legalization in Connecticut.
(2) Prior to the acquisition, our targets were limited liability companies and as such we used approximately 26.5% of revenue less cost of goods sold (excluding depreciation), and estimated this rate at approximately 70%.
(3) Interest expense calculated using the effective interest rate method, as per Section 11 pro formas.
(4) Depreciation expense is based on a preliminary measurement at fair value, with its related impairment and is used in our Section 11 proformas, which may change upon completion of purchase accounting under ASC 805 .
(5) This excludes all expenses related to the transaction.

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