TPCO Holding Corp. (OTCPK:GRAM.F) signed a definitive agreement to acquire Coastal Holding Company, LLC for $56.2 million on October 1, 2021. Under the terms of the agreement, TPCO Holding agreed to acquire 100% of the equity securities of Coastal for aggregate consideration, subject to adjustments, of up to $56.2 million, comprised of up to $16.2 million in cash, $20 million in common shares of TPCO Holding contingent upon signing management services agreements at each Coastal location and $20 million in common shares of TPCO Holding contingent upon the successful transfer of Coastal's cannabis licenses. TPCO Holding has entered into management services agreements concurrently with signing the agreement for a majority of Coastal's operating locations and anticipates signing management services agreements for the remaining Coastal operating locations in the coming days. The cash portion of the transaction is secured by a promissory note forgivable upon Coastal satisfying certain closing conditions. The price of the common shares of TPCO Holding issued in respect of each of the service agreements or on the transfer of licenses will be determined based on the market price of TPCO Holding common shares on the dates such management service agreements are executed or regulatory approval milestones are achieved prior to closing. Equity issued as part of this transaction is subject to lock-up provisions that release upon the satisfaction of certain closing conditions and, in any case, a period of not less than six months. As part of the transaction, TPCO Holding will also inherit a minority stake in a Southern California dispensary, and an option to purchase the remainder of that dispensary for $9 million in cash which may be exercised by TPCO Holding following receipt of certain regulatory approvals. $4.5 million of the Option was prepaid upon execution of the agreements. Completion of the transaction remains subject to written resignations in form and substance reasonably acceptable to TPCO Holding effective as of the closing from each officer and director of each Coastal Entity, regulatory approvals, a certificate of good standing (or applicable equivalent) from the Secretary of State, an assignment of the Nominee Agreements by the Nominees, written notice of exercise by each holder of the warrants effective immediately prior to the closing, including approval of the NEO Exchange. The transaction is unanimously approved by the board of TPCO and approved by the board of Coastal. The transaction is also approved by the common unitholders of Coastal. The transaction is expected to close in 2022. William E. Doran from Benesch, Friedlander, Coplan & Aronoff LLP served as a legal advisor for TPCO Holding. Venable LLP served as a legal advisor to Coastal.
TPCO Holding Corp. (OTCPK:GRAM.F) completed the acquisition of Coastal Holding Company, LLC for $41.7 million on November 14, 2022. The total consideration was comprised of $28.3 million in cash (of which approximately $16.2 million was used to repay Coastal indebtedness and $9 million was used to exercise Coastal's option to acquire the remaining equity of a dispensary located in Pasadena, California) and 25 million shares of a wholly owned Company subsidiary exchangeable into common shares of The Parent Company. The shares of Coastal acquisition Corp are exchangeable on a one-for-one basis into shares of the Company. The Company also paid an additional $3.1million upon closing and assumed approximately $1.9 million of debt.