Indus Holdings, Inc. + LOWELL HERB Co. = LOWELL FARMS INC.

Here's what you need to know.

Lowell Herb Co.

From its packaging to the high quality of its products, Lowell Herb is a premium California cannabis brand with an extremely popular reach and audience. It is best known for its distinctive pre-rolls and unique logo, and its reputation of authenticity and heritage has become synonymous with quality and refinement.

The preroll market grew 65% in California between 2019 and 2020. Flower smoking is alive and well and proving to be a preferred method of consumption among newcomers and traditionalists alike.

Lowell has a loyal customer base since its founding. The company has over 1 million in weekly impressions across all social media platforms and 3 million impressions on YouTube. Its total audience is up 68% year over year and its engagement is up 132%.

In addition, the company remains strong and relevant as its 2020 activity was extremely healthy with revenues of $14.9 million.

Why This Is a Great Merger

This merger strengthens and complements each of the companies. Indus, for example, does not have a marquis brand with adequate pull and differentiation to absorb a price compression (when supply inevitably exceeds demand). This merger opens up prospects for nationwide licensing and expansion opportunities as the brand has national recognition among cannabis consumers.

A premium brand like Lowell can help pull Indus products into dispensaries as it can leverage the availability of the brand against sell-through of its other inventory — helping to launch new products without using price as the primary inducement for dispensaries.

This collaborative outcome will bring together a consistent and reliable supply of some of the best cannabis in the world. The results? It creates a broader distribution and sales coverage, infrastructure to automate and mechanize production, capital for aggressive marketing expansion, and diversified manufacturing capabilities that afford a substantial opportunity for brand expansion. 

What is Lowell Farms, Inc.?

Lowell Farms, Inc. is a California-based vertically-integrated cannabis company with advanced production capabilities supporting every step of the supply chain, including cultivation, extraction, manufacturing, brand sales, marketing and distribution. Lowell Farms, Inc. grows artisan craft cannabis with a deep love and respect for the plant and prides itself on using sustainable materials — from seed to sale — to produce an extensive portfolio of award-winning original and licensed brands, including Lowell Herb Co, Cypress Cannabis, MOON and Kaizen Medicinals for licensed retailers statewide.

Transaction Overview

The new company is called Lowell Farms Inc. and has traded since March 5 under LOWL LOWLF. The transaction is valued at approximately $39 million and is comprised of a cash payment of$4.1 million and the issuance of 22,643,678 Subordinate Voting Shares of the Company (of which 5,000,000 will be held in escrow to secure certain indemnification obligations undertaken by the sellers in the transaction).

"We are hard at work pairing the best brand in cannabis with unparalleled production capabilities," said Lowell Farms Chairman George Allen. "By combining our existing infrastructure and capabilities with Lowell's brand and leadership, we are building a business that has no equal in cannabis."
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