Cannabis extraction companies Precision Extraction Solutions and Cascade Sciences have entered into a merger that could be called the perfect scientific marriage.
The deal seeks to create the "first major consolidation in the cannabis extraction equipment and life sciences space."
The deal came about after only six weeks of discussion between Cascade and Precision Extract, said Nick Tennant, founder and chief technology officer at Precision Extraction Solutions.
“We’ve both got former lawyers and former investment bankers on our team, so there wasn’t much need for outside help to push the deal through,” Tennant told Benzinga.
Precision Extraction, Cascade Sciences Deal Notes
For starters, the two companies together make up the largest cannabis and hemp extraction equipment and services company in the world; their innovative technological offerings in the area of extraction and processing are essentially in a class of their own.
An additional perk: the companies will boast a combined annual revenue of over $100 million in estimated gross profits. The new company, Tenant said, will produce a vast range of products and services that will span pre-to-post extraction and testing.
And this is not to mention the potentially huge global cannabis extraction industry - as in $28.5 billion by 2027, according to Grand View Research, which implies phenomenal exponential growth for investors and stakeholders as well as fully integrated production solutions for consumers.
The new company will add more brands to its combined portfolio, including highly innovative and disruptive technologies to further its growth.
Right Place At The Right Time? Not Necessarily
Tennant, 36, along with his colleagues, said he saw cannabis concentrates popping up some 10 years ago and figured they were headed to become the next dominant product in the industry.
“So I locked myself in my house for eight months and started researching.” When he finally came out, he knew where his company needed to go.
“Most people focus on the cannabis growing niche and the retail niche and pay little attention to the one in between: extraction,” he said.
So that’s where they went and the rest is history.
“Fifty percent of the products that most people use are the result of refining the cannabis plants’ biomass into concentrates or some other extract-based consumable form. We are responsible for 95% of the extraction infrastructure being used by the MSOs in the country at the moment,” Tennant said.
Going Public Anytime Soon?
The phones are ringing off the hook, so to speak.
“The attention has been extraordinary. But our motivations are different. For now, we really enjoy what we’re doing and for that reason, we’re not committing to any deals as yet. We’re keeping the lines of communication open,” Tennant said.
The newly formed company will have offices, warehousing and production facilities throughout the country including California, Colorado, Michigan, New Jersey and Oregon.
From an organizational standpoint, the CEOs of both Precision and Cascade are stepping down; Doug Dowd will act as CEO of Sinclair Scientific.
In addition, Marc Beginin of Precision Extraction Solutions and Lee Kearney have each taken seats as directors on the newly formed board of Sinclair Scientific.
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