Supreme Cannabis buys Langley producer Blissco for $48 million

All-stock deal will see Blissco CEO Damian Kettlewell stay with the company

Blissco CEO Damian Kettlewell stands in front of his company's branding on a background that resembles a living wall at his Langley facility | Glen Korstrom

Langley-based cannabis producer Blissco Cannabis Corp. (CSE:BLIS) has reached a definitive agreement to sell itself to Toronto’s Supreme Cannabis Co. Inc. (TSX:FIRE) for $48 million, the companies announced May 16.

Blissco founder and CEO Damian Kettlewell, who plans to stay with the company, said in a May 16 statement that the transaction with Supreme was the best way to have Blissco achieve its ambition to deliver “innovative, quality-assured, full-spectrum cannabis products to the world.”

Blissco investors did not immediately seem to be enamoured with the all-stock deal, given that at around 11 a.m. in Vancouver, Blissco's shares were down more than 5.4% to $0.44. Supreme Cannabis' shares were up about 0.5% to $1.87. 

Business in Vancouver spoke with Kettlewell on May 15, the day before the deal was announced, and while he did not reveal that a deal was in the works, he said business was going well and the company was expanding.

“We’re focused now on building out our ethanol-extraction lab,” he said. “That’s our main focus right now. It’s not completed yet.”

Another project for Blissco is to build a 6,000-square-foot mezzanine over its vault to create additional storage space, but that project is not yet completed.

The extraction lab is important because Kettlewell intends to expand production significantly from the few hundred thousand 30-ml bottles of cannabis oil tinctures per year.

Click here for insight on what it is like to tour Blissco’s 12,000-square-foot facilities, as Kettlewell took BIV on a tour of the site last year.

Supreme has had a history with Blissco

Blissco has had two funding rounds. First was a $3.2 million round in July 2017, which included more than 100 investors and was led by Varshney Capital.

A second capital raise, in February, 2018, brought in $5.5 million, including $3 million from Supreme. Blissco went public the next month.

Supreme also supplied Blissco with six strains of cannabis seedlings, and the two companies have an agreement under which Blissco can sell up to 3,000 kilograms of product. Last October, Kettlewell told BIV that only about 90 kilograms of that product was on site.

Blissco in October had planned to produce about 10% of the product that it would sell. The rest would come from either Supreme or a second LP partner, GreenSeal Cannabis Co., Kettlewell said at the time.

“Scaling up from a zero-revenue company to a multimillion-dollar company, within one year, is our biggest challenge,” said Kettlewell, “but I wouldn’t call it a problem.” •

gkorstrom@biv.com

@GlenKorstrom