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Plus seeks to dominate cannabis edibles market with acquisition

Since the legalization of recreational cannabis in California, edible products infused with cannabis have become more popular with consumers. Retail figures from the third quarter of 2018 ranked Plus Products Inc. as the producer of the best-selling edibles brand in the state. To build upon this success, Plus acquired GOOD CO-OP, another producer of baked cannabis foods.

GOOD had already established its products with consumers by making brownies and pumpkin spice goldies without additives or preservatives. The management at Plus views the acquisition of GOOD as a means of expanding farther into the cannabis baked goods market. Plus was already operating a 12,000-square-foot manufacturing facility and now has brought another 4,800 square feet of manufacturing capacity under its umbrella by buying GOOD.

The CEO and co-founder of GOOD welcomed the acquisition because the company had been seeking a strategic partner that could accommodate its plans for expansion. Plus had the resources to manufacture food products at a greater scale. The CEO and co-founder of Plus said that both companies shared the values necessary to produce high-quality foods.

Acquisitions often play a role in a company's desire to expand. A person responsible for overseeing the purchase of another company might gain important insights by working with an attorney knowledgeable about mergers and acquisitions. Legal research may aid with the process of valuing a company's assets and identifying its existing liabilities. An attorney may also participate in negotiations to develop the terms that guide the joining of companies. This process might involve drafting the purchase agreement, developing severance packages and reworking shareholder agreements.

Source: Market Watch, "With Strategic Acquisition, Plus Products Expands Capacity & Offering -- CFN Media", Dec. 6, 2018

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