San Diego, CA--GABY Inc., the umbrella company of San Diego's Mankind Dispensary, announced in a news release its strategic acquisition of three CBD brands: HempFusionTM, Sagely NaturalsTM, and apothecannaTM, through a share purchase agreement with HempFusion Wellness Inc.
"This acquisition allows us to expand our CBD division and realize additional revenue from an alternative channel outside the regulated cannabis industry. GABY is extremely fortunate to be able to acquire these high-quality established brands for such great value," said Margot Micallef, Founder and Chief Executive Officer of GABY, in the news release.
"GABY's management team has extensive experience in building consumer-facing brands, putting GABY in a strong position to create further shareholder value from this acquisition," Micallef added.
To solidify this acquisition, GABY will issue 13,011,148 shares (post GABY Share Consolidation) to HempFusion Wellness Inc. upon the deal's closure.
Transaction Highlights
The transaction highlights are below, as per the news release:
HempFusionTM: A brand for topicals and ingestibles, HempFusionTM boasts an FDA-listed over-the-counter pain relief topical with hemp-derived CBD. It also has the largest Human Toxicology Study under its belt, deeming CBD safe for human consumption.
Sagely NaturalsTM: Sagely NaturalsTM secured its spot as the top-ranking topical brand in Multi-Outlet retail locations in the US in 2021. Men's Health Magazine recognized its Relief and Recovery Active Roll-OnTM as "Best for Pain Relief" in 2022.
apothecannaTM: Predominantly a Direct-to-Consumer brand, apothecannaTM has an impressive 90% five-star rating from customers, with a remarkable 70% repeat purchase rate.
The collective revenue of these brands surpassed US$5.4 million in 2022. GABY management envisions a prosperous future for these brands, particularly post-legislative clarifications around hemp-derived CBD.
GABY's Financial and Organizational Challenges
On August 17, 2023, GABY Inc. confirmed it would be concluding its operations by August 31, 2023, and announced the resignation of its core leadership, including Simon Lileikis and Leanne Likness.
GABY faced a considerable debt of $22.5 Million related to its Type 10 retail license linked to its subsidiary, Miramar Professional Services (MPS).
Given this challenge, the company opted for a reversal remedy, wherein they forfeited their shares in MPS, effectively erasing the $22.5 Million debt.
This decision, made in July 2023, was followed by the resignation of Ebon Johnson from GABY's board of directors.
Though facing these challenges, GABY Inc. will evaluate the potential continuation of its CBD business under brands like Lulu's and 2Rise.