Aequl'o Groin Proclpar Inc. lvlliron also considered increasing HEJ-ED's production capacity by acquiring one of its competitors, Green Prosper lnc.. which was based in Charlottetown, Prince Edward Island, and had the capacity to produce EDll kg of cannabis annually. Green Prosper Inc. was an appealing acquisition target: it had strong management in place and could provide disn'ihution channels to customers in the Maritime ProvincesI a region not currently serviced by HERD. Green Prosper Inc. also had a wide selection of cannabis oils, a product area that HERD had yet to incorporate within its \"house of brands." Green Prosper Inc's income was increasing, and its nancial position had been improving over the past two years [see Exhibits 1 and it]. Miran knew that HERD would need to pay a signicant premium above the book value of Green Prosper lnc.'s equity. He esmated that Green Prosper Inc. would agree to an offer of $12.0 million for 1111] per cent of the company. HERD would amortize the cost of Green Prosper Inc's book value over ED years. Since the stock market value of cannabis companies was at an all-time high. lvliron wondered whether it made sense to acquire Green Prosper Inc. now or to wait for the market to cool and then acquire Green Prosper Inc. at a lower price. lfacquiredl Green Prosper Inc. would operate at a higher utilization rate of between 4U per cent and 5C! per cent. The selling price per gram would be the same as that of the new greenhouse, but the cost to produce each gram would be slightly higher, at $ 1.5. lvliron estimated that Green Prosper lnc.'s gross medical sales would increase by the same growth rate as in scal yearll'? and that thecost ot'goods sold would be the PIE 3" IBEDBDDE same percentage of sales as in fwcal 2131?. Recurring marketing and promotional expenses would be equal to It] per cent of recreational marijuana sales, and general and administrative expenses would increase by a factor of ve from Green Prosper lnc.'s it'll\"? income statement. Research and development expenses and working capital days would he the same as for the greenhouse opporttmity. Miron estimated the acquisition would be completed in January 2MP, and one-time legal fees would total ill) million