Worlds Online Inc. (“WORX”) announced this week it has entered into a agreement to have its subsidiary, MariMed Advisors, Inc., acquire Sigal Consulting LLC, a Massachusetts-based developer of medical marijuana licenses and operations. It is anticipated that the closing will occur in three to four weeks, according to a press release from both companies.
Sigal is the company that designed the Thomas C. Slater Compassion Center cultivation and dispensary facility in Providence, Rhode Island, and works with other medical marijuana growers and dispensaries throughout the United States. The acquisition offers Sigal access to the public markets that can provide expansion capital and a first-to-market advantage, according to Julie Shepherd of Accentuate PR.
Upon closing, Sigal Consulting will operate through MariMed Advisors, Inc., as a majority-owned subsidiary of WORX. This acquisition will serve to diversify WORX’s operational business into the growing licensed medical marijuana industry.
“Medical marijuana is a rapidly expanding market that is expected to double in the next five years,” said Worlds Online CEO Thom Kidrin. “The combination of this large emerging market opportunity and Sigal Consulting team’s years of successful experience and industry leadership will provide an opportunity for us to add significant value to our shareholders and a potentially great opportunity for growth.”
“Based on Sigal’s validated business model, its proven professional management, and the rapidly growing number of states approving licensure for medical marijuana, our board of directors, acting through its independent directors, has determined that diversifying WORX through the establishment of a new subsidiary called MariMed Advisors, Inc., and the acquisition of Sigal Consulting LLC, would be in the best interest of our shareholders,” Kidrin said.
An independent financial analysis firm (See Change Strategy) estimates there are 730,000 current medical marijuana patients, and 24.8 million eligible patients. ArcView Market Research projects the legal marijuana market will grow to $10.2 billion by 2018.
For many in the medical marijuana industry, knowledge, experience and access to capital have been major obstacles to growth. Federal regulations still restrict financial institutions from financing medical marijuana entities.
“WORX’s public company structure and experience in the capital markets provide access to the public markets that can provide expansion capital and a first-to-market advantage,” Kidrin said.
“Multiple states are changing their regulations to allow the sale of medical marijuana and there is a void of experience in how to obtain licenses, produce and deliver safe medical cannabis in compliance with the laws of the various states,” said Robert Fireman, founder and CEO of Sigal Consulting and a director of WORX. “This is creating a high demand for our experienced team to help potential entrants into the industry navigate the complex regulations, licensing, tracking, security, cultivation and operating practices as the product moves from seed to sale.”
“I believe that the opportunity to provide programs and services to the hundreds of new licensed facilities is potentially very significant,” Fireman said. “These healthcare facilities need to produce and deliver safe medical cannabis to thousands of patients with debilitating illnesses.”
According to Fireman, Sigal Consulting’s extensive experience and knowledge of licensing, development, cultivation, operations, security, healthcare, and financing for the licensed medical marijuana industry is demonstrated in the state of the art Thomas C. Slater Compassion Center, a regulatory-compliant and fully operational cultivation and medical marijuana dispensary in Providence, Rhode Island.
Sigal Consulting says its team designed this facility “as a replicable model of excellence for other medical marijuana centers to be developed as additional states approve the use of medical cannabis.” Sigal Consulting serves clients in Rhode Island, Massachusetts and California, and is currently expanding and/or planning to expand its services to applicants and license holders in additional states, including New Mexico, Illinois, Nevada and Florida.
The Sigal Consulting transaction is subject to regulatory approvals and customary closing conditions. If all closing conditions are satisfied, the transaction is expected to close within 30 days.