4Front Ventures Corp. acquired New England Cannabis Corporation, Inc. from Kenneth V. Stevens for approximately $27.5 million.
January 27, 2022
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4Front Ventures Corp. (CNSX:FFNT) entered into a definitive agreement to acquire New England Cannabis Corporation from Kenneth V. Stevens for $35.6 million on October 6, 2021. Consideration includes cash in the amount of $4,000,000, plus cash in the amount of $2 million as an adjustment on account of the cannabis products and/or inventory transferred from NECC to 4Front between the date hereof and the closing date, minus the amount outstanding under that certain Loan Agreement between NECC and Kenneth V. Stevens in the original principal amount of $675,000 and a promissory note in the initial principal amount of $5,000,000, which will bear interest at an annual rate of 10% and mature on the second anniversary of the closing of the merger and 25 million shares of Class A subordinate voting stock of 4Front with a deemed value of $1.20 per share, or a total valuation of $30 million. The purchase price will be funded through the issuance to the seller of 25 million subordinate voting shares of the company and $25 million of cash. On January 28, 2022 4Front Ventures Corp. (CNSX:FFNT) paid Mr. Stevens cash in the amount of $9,000,000, and issued Mr. Stevens 28,571,428 Class A Subordinate Voting shares of the Company (the “SVS”), with a deemed value of $1.05 U.S. dollars per share, or a total estimated valuation of$30,000,000 as the Merger Consideration. The cash portion will be funded through proceeds raised from a $15 million convertible notes offering, led by Navy Capital, a vendor take back note and balance sheet cash. NECC will continue its corporate existence as a wholly-owned subsidiary of 4Front. The separate corporate existence of NECC will cease. NECC will change its name to New England Cannabis Corporation, Inc. The transaction is subject to receipt of regulatory approval, consummation of the transactions contemplated by that certain membership interest purchase agreement to be entered into by 4Front, Kenneth V. Stevens and Mission Partners RE, LLC and the satisfaction or waiver of customary closing conditions. The transaction is expected to close in the fourth quarter of 2021. Transaction is expected to be significantly accretive to the Company's EBITDA expectations for 2022 and will immediately scale 4Front's presence as a dominant wholesaler and producer in the State. Fort Capital Partners acted as sole financial advisor to 4Front on the Transaction. Evmarc Advisors acted as financial advisor to NECC on the Transaction. Jeremy Shaw from Vicente Sederberg, LLC served as a legal advisor for NECC. Jeffrey A. Scudder from Snell & Wilmer, L.L.P. served as a legal advisor for 4Front. Fasken Martineau DuMoulin LLP acted as legal advisor to 4Front Ventures Corp.
4Front Ventures Corp. (CNSX:FFNT) completed the acquisition of New England Cannabis Corporation from Kenneth V. Stevens on January 28, 2022.
4Front Ventures Corp. is a multi-state cannabis operator and retailer. The Company owns or manages licensed cannabis facilities in state-licensed markets in the United States. It manufactures and distributes a portfolio of over 25 cannabis brands including Marmas, Crystal Clear, Island, Verdure, and the Pure Ratios wellness collection, which is distributed through retail outlets, as well as the Companyâs chain of branded dispensaries. The Company's segments include THC Cannabis and CBD Wellness. The THC Cannabis segment is engaged in cultivation, production, manufacturing, and distribution of THC cannabis products to owned dispensaries and third-party retailers, ancillary services supporting wholesale operations, and retail sales direct to end consumers. It also leases real estate and sells equipment, supplies, and intellectual property to cannabis producers in the state of Washington. The Companyâs CBD Wellness segment sells non-THC hemp derived products across the United States.
4FRONT VENTURES CORP. 
