Marijuana Co. of America (MCOA) has acquired a stake in Natural Plant Extract of California and its subsidiary, Northern Lights Distribution.
Marijuana Co., a $21 million market cap cannabis marketing and distribution operation, will take a 20% stake in Natural Plant Extract, another distributor. Marijuana Co. will pay $2 million in cash and $1 million in stock, valuing the target company at $15 million.
MCOA was up 10.43% to 13 cents a share Wednesday afternoon.
The combined company will form a business called Viva Buds, which MCOA and NPE will share the profits of on a 50-50 basis. Viva Buds will also serve as a marketing arm for Northern Lights Distribution. NLD will contribute roughly $300,000 worth of inventory to the distribution operations.
"This partnership will enable MCOA to establish itself as a major player in the cannabis arena," said Donald Steinberg, CEO of MCOA. "The NPE team has a great deal of industry knowledge and has an industry disruptive business model. This is a huge strategic move for MCOA."
"We are excited to become partners with MCOA as it will help us to finalize the development of our manufacturing plant faster than planned," said Alan Tsai, NPE's CEO.
MCOA went public in 1999 at 20 cents a share, popped to more than $500 a share in 2000, and is now trading at 2 cents a share.