Vancouver, British Columbia – TheNewswire - April 6, 2022 – Blackhawk Growth Corp. (CSE:BLR); (Frankfurt:0JJ) (the “Company” or “Blackhawk”) is pleased to announce that the Company has entered into a share purchase agreement, dated effective April 5, 2022, pursuant to which it proposes to acquire all of the outstanding share capital of Blum Distributors Ltd. (“Blum”).
Blum is an established mycology supplier with its own leased production facility. Blum’s operations are systemically rooted in biodiversity. They wholly-own the value chain from cultivation through to their product sales, reaching both commercial and retail partners. Their sustainability pledge is embodied in their commitment to support their partners in their own mycological journeys. Blum’s in-house product cultivation, distribution, and sales center provides them with an advantage over their competitors by reducing intermediaries. Blum fully controls the quality and purity of their products throughout the value chain, from cultivation to consumer sales. They are committed to providing the utmost highest quality supplies and solutions to empower both commercial and home scale growers in their mycological journey.
Blum has been in operations in its current form for over 18 months and has historically generated approximately $50,000 in gross revenue per month over 2021. The revenue base has grown in 2022, with the addition of two agreements. The first contract has Blum providing a white label solution for an arm's length company for Applied Myco. The contract guarantees for a minimum order of 500 bags per month during its Phase 1 trial and is expected to increase to up to 2,000 bags per month in Phase 2 and 3 over the next 12 months. The guaranteed minimum order will generate approximately $12,500 per month in gross revenue, and is expected to increase to in excess of $50,000 per month in revenue. Gross margin on the products historically has been approximately 50% and this margin is expected to continue.
The next recent sale, which is expected to start delivery in April, will see Blum expand its cultivation through a 14,000 sq ft commercial project which is guaranteed to begin with an order for 5,000 bags per month, which is expected to create gross revenue of approximately $125,000 per month. When the cultivation centre renovations are completed, the contract has production increases of 5,000 per cycle to a maximum size of 50,000 bags per month. If the maximum contract deliveries are reached, the order will generate in excess of $1,000,000 per month in gross revenue for Blum, based on current sales prices.
“Blum’s growth continues to be impressive” said Frederick Pels, CEO of Blackhawk Growth. “The ancillary side of cultivation allows Blackhawk to be involved in the success of the industry as a whole, providing high quality and necessary substrate to the industry. I look forward to working with the team at Blum and updating our shareholders as progress develops.”
“We at Blum Distributors are extremely excited to close this deal and grow both Blum and Blackhawk” says Rico Gutierrez, Founder of Blum. “This opportunity will allow us to further accelerate our on-going demand of production and supplies and will assist us to expand our facility and operate at full capacity to facilitate the fast-growing mycology industry.”
Rico Gutierrez founded Blum and will continue as its CEO. Mr Gutierrez has been involved in the mycology industry for a number of years. Prior to founding Blum, he was a successful entrepreneur and the founder of several companies in various industries. With his experience and skill set, Rico managed to assist numerous companies with mentorship and business development.
Readers are cautioned that the above figures for revenue and margin of Blum are based on information provided by management of Blum and have not been audited or independently verified. Actual figures may differ once an audit has taken place.
In consideration for the acquisition of all of the outstanding share capital of Blum, Blackhawk will issue 9,650,000 common shares to the existing shareholders of Blum.
The Company is at arm's length from Blum and its shareholders. The transaction neither constitutes a fundamental change nor a change of business for the company, nor has it expected to result in a change of control of the company within the meaning of applicable securities laws and the policies of the Canadian Securities Exchange. With the acquisition, Blum will form part of the Company's growing portfolio of investments in the life science and health care sectors. Blum’s existing management team will continue to retain responsibility for overseeing day-to-day operations. A fee of 750,000 shares will be paid to an arm’s length party for assistance with the transaction.
For more information regarding Blum visit their website: www.blumdistributors.com
About Blackhawk Growth
Blackhawk is an investment holding company looking to create substantial value for its shareholders through the acquisition and development of high growth companies. It has focused its investments in the health, cannabis and cannabidiol industries in both Canada and the United States. Its portfolio of companies includes Sac Pharma, Terp Wholesale, LeichtMind Clinics, Noble Hemp, Spaced Food, Stable Foods, and MindBio Therapeutics, Digital Mind Therapeutics as well as an equity position in Gaia Grow Corp. (CSE:GAIA).
The Company diligently posts updates through videos from the official company YouTube channel https://www.youtube.com/channel/UCs4f2tt3yAvOGhNLjgNOy-A
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For further information please contact:
Frederick Pels, Chief Executive Officer
Cautionary Note Regarding Forward-Looking Statement
All statements in this press release, other than statements of historical fact, are “forward-looking information” with respect to the Company within the meaning of applicable securities laws, including with respect to the future operations of Blum Distributors Ltd.. The Company provides forward-looking statements for the purpose of conveying information about current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. By its nature, this information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. These risks and uncertainties include but are not limited those identified and reported in the Company’s public filings under the Company’s SEDAR profile at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise unless required by law.
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