Cannabis
Cannabis CPG MSO BellRock Brands Announces Completion of New Manufacturing Facilities in Desert Hot Springs, CA and Jackson, MI
BellRock Brands Inc. (“BellRock” or the “Company”) (CSE: BRCK.U), an industry-leading cannabis consumer packaged goods (“CPG”) multi-state operator (“MSO”), announced today that the construction of two production facilities in Desert Hot Springs, CA and Jackson, MI is complete. Both facilities are now fully operational, producing a wide range of BellRock products.
The opening of these two facilities provides BellRock complete control over the manufacturing of its four brands, Mary’s Medicinals (Mary’s), Dixie Brands (Dixie), Rebel Coast and Défoncé, in the markets where those brands are sold. The Desert Hot Springs, CA facility is a 12,000 square foot building that has begun producing the Company’s food and beverage products. BellRock will maintain its second California manufacturing facility in Grover Beach, which currently produces Mary’s non-ingestible products. The 16,000 square foot Jackson, MI facility has begun producing both Mary’s and Dixie products.
“We are pleased to announce that our Desert Hot Springs and Jackson facilities are now open and fully operational. It has been our goal to shift away from third-party manufacturers and bring the capability in-house,” said Brian Jansen, President of BellRock. “The completion of these two facilities represents our ability to realize efficiencies and obtain full control of the manufacturing of our brands, while increasing revenue and profitability.”
Mary’s began distributing its own products in California in 2019 and currently operates distribution centers in Van Nuys, San Rafael, and Grover Beach. In 2020 Mary’s began distributing Rebel Coast and Défoncé products and presently all three brands are represented by the BellRock sales team in California. Dixie will join the BellRock portfolio on the same sales and distribution platform in Q2 this year. Mary’s and Dixie entered Michigan in 2018 and 2019, respectively.
Jansen continued: “We are deeply committed to providing our consumers with the highest quality products while providing excellent service to our consumers, and the establishment of these two facilities helps us achieve that goal. We continue to find ways to capitalize on synergies that exist within our organization to profitably expand our business, and we believe this ultimately provides value to our shareholders.”
Share Issuances
In order to clarify the Company’s prior disclosure, the Company wishes to confirm the issuances of the following shares on the following dates:
Date of Issuance |
Number of Common Shares Issued |
Price per Common Share (USD$) |
Reason for Issuance |
December 31, 2020 |
12,499,999 |
0.11 |
Private placement to raise funds for general working capital (the “Private Placement“). |
December 31, 2020 |
83,333 |
0.36 |
Consideration for extinguishment of bona fide debt. |
January 8, 2021 |
380,208 |
0.36 |
Consideration for extinguishment of bona fide debt. |
The Private Placement included subscriptions from insiders of the Company. Participation of insiders of the Company in the Private Placement constituted a “related party transaction” as defined under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101“). The Company has relied on exemptions from the formal valuation and minority shareholder approval requirements provided under sections 5.5(a) and 5.7(a) of MI 61-101 on the basis that at the time of completion of the Private Placement the participation in the Private Placement by insiders did not exceed 25% of the fair market value of the Company’s market capitalization, and because the Company’s Common Shares trade only on the Canadian Securities Exchange.
The Company did not file a material change report more than 21 days prior to the closing of the Private Placement as the details of the Private Placement and the total amount to be invested by insiders was not settled until shortly prior to the closing of the Private Placement, and the Company wished to complete the Private Placement on an expedited basis for sound business reasons.
All securities issued are subject to a four-month hold period in accordance with applicable securities legislation.
This news release does not constitute an offer to sell, or a solicitation of an offer to buy, any of the securities referenced herein in the United States. The securities referenced herein have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act“) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
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