Cannabis Companies On The Move: Greenlane And KushCo Shareholders To Vote On Proposed Merger

Greenlane Holdings, Inc. GNLN and KushCo Holdings, Inc. KSHB are wrapping up their merger.

On Tuesday, the companies announced the commencement of the proxy solicitation in connection with the all-stock deal, under which KushCo agreed to become a wholly-owned subsidiary of Greenlane.

Shareholders of both companies will vote to approve the merger agreement on August 26.

The latest development in the formation of the combined company follows the expiration of the 30-day waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 for the proposed merger in May.

The Merger Deal

Under the previously announced deal, which is expected to close in the third quarter of 2021, KushCo shareholders will hold roughly 49.9% of the combined company, while Greenlane shareholders will hold the remaining 50.1%.

KushCo shareholders will obtain approximately 0.2546 shares of Greenlane Class A common stock for each share of KushCo common stock held. In addition, Greenlane Class C shares will be transformed into Greenlane Class B shares on a 3-to-1 basis.

Nick Kovacevich, co-founder, chairman and CEO of KushCo, agreed to serve as CEO of the joint company once the deal closes, while Greenlane's co-founder Aaron LoCascio will become president and Bill Mote CFO.

The board of the newly combined company will include four members from Greenlane and three from KushCo.

The merger is projected to result in approximately $15 million to $20 million of yearly run-rate cost synergies, driven by economies of scale, in the two years following the transaction closing. The combined entity is expected to generate $250 million in pro forma revenue in 2020, with a market capitalization of over $350 million.

Photo by Esteban Lopez on Unsplash