Stem completes term sheet for merger with Headwaters

STMHSTEM, a California-based greenhouse cultivator, has completed a term sheet for a proposed business combination with Headwaters, LLC, a vertically integrated cannabis operator.

Stem has worked tirelessly to find the right company to transact a business combination with over the past 12 months. Matthew Cohen, CEO of Stem, said, "We could not be more excited about combining with Headwaters, LLC."

The transaction will result in a reverse takeover of the company and will result in the listing of the combined entity on the Canadian Securities Exchange and the OTCQB Venture, subject to the satisfaction of all listing conditions.

After the closing of the transaction, it is expected that the former equity holders of HDWTR will own about 80% of the issued and outstanding Stem shares.

This transaction will bring world-renowned cultivation processes to the market, but by combining with Stem and the existing footprint of brands and retail locations, we will instantly become a pre-eminent vertically integrated and profitable cannabis company with a new platform and a vision to bolster even more accretive transactions in the future, Cohen said.

According to the release, the transaction is expected to be completed by a merger, merger or other forms of business combination, subject to the execution of a mutually agreeable definitive agreement, completion of due diligence, and subject to several conditions.

Headwaters has an emerging brand called Mr. Zips. The founder of the company is eager to expand. Tristan Strauss, founder and CEO of Headwaters, said that the Stem team enables us to grow our business to the next level. Headwaters is well-positioned to disrupt the world's largest cannabis market and expand into new territories with access to capital markets and Stem's valuable network. This is the place where money is raised, M&A start, and companies meet key partners. On April 11 - 12, join the Fontainebleau Miami Beach Hotel in Florida.