Stem Holdings, Inc. (OTCQX: STMH CSE: STEM), a company with state-of-the-art cannabis and hemp cultivation, processing, extraction, retail, and distribution operations throughout the United States, has completed its previously announced acquisition of Driven Deliveries, Inc. (OTCQB: DRVD), an e-commerce and DaaS (delivery-as-a-service) provider with proprietary logistics and omnichannel UX/CX technology.
The acquisition was completed under the terms of a definitive agreement whereby Driven shareholders received one share of common stock of Stem for each Driven share held.
The combined company is projected to have revenues of US$75M in 2021 and a combined gross profit of US$30 million.
Driven currently operates in California, the largest U.S. cannabis market which has a $4 billion run-rate for annual cannabis sales, and the fifth-largest economy globally. As reported by New Cannabis Ventures in October 2020, total unit sales in California grew 45%, with 700 dispensaries statewide, and 40% of the population living within 60 miles of a dispensary.
Driven is the largest online cannabis retailer in the state of California, covering 92% and growing.
With cannabis consumers expected to rely increasingly on home delivery, as with other consumer product, and online purchases post-pandemic, it is expected that Driven is poised to meet increasing demand and will accelerate the distribution of upcoming Stem products entering the market in 2021.
‘This acquisition is a game-changer for the industry, for our valued customers, and for shareholders of Stem,” stated Adam Berk, Chief Executive Officer of the Company. “Stem is now uniquely poised to meet growing demand in the evolving marketplace for top quality cannabis with our exciting brands and omnichannel capability to create loyalty among consumers who can now choose whether to buy in-store, through curbside pick-up, or to have swift home delivery at any time,” he continued. “And with research showing that 68% of consumers expect to continue home delivery post-pandemic, we will be in the best position to service our customers in all current and future markets,” he concluded.
Driven By Stem’s brand offerings will cover multiple cannabis product categories, particularly flower, extracts, edibles, and topicals with award-winning brands including TJ’s Gardens™ and Yerba Buena™; Cannavore™ an edible brand; and Doseology™, a CBD mass-market brand launching in 2021. As a cannabis technology company, Driven’s Budee™ and Ganjarunner™ e-commerce platforms are expected to partner with leading cannabis companies in new geographies to meet the demand for quick and accurate product deliveries.
Stem has already announced key expansion strategies in place for 2021. These strategies rely heavily on the technology and services that Driven can provide.
The company plans to launch Driven’s delivery platform in Oregon in Q1/CY21, focusing on Stem’s owned-brands to expand its distribution footprint, as well as brands that complement the portfolio.
Stem will also launch its own Yerba Buena™ brand in California, its first new market for the brand. Known for both its THC and CBD proprietary genetics, products will include market-leading cultivars for flower and pre-roll. All products will be distributed by Driven or sold through the Company’s Northern California-based medical dispensary, Foothills Health & Wellness.
Further expansion of additional new margin-accretive Stem brands and products starting in California, including Cannavore™ edibles now available in Oregon and Nevada, and TravisxJames™ vapes based on the success of the brand in Nevada. Distribution will expand into all new markets with Driven’s proprietary software providing speed to market.