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Marijuana firm Cresco Labs charts plan to go public in Canada
October 12, 2018
Multistate cannabis operator Cresco Labs is looking to go public in Canada via a reverse takeover (RTO), the latest U.S. firm to use this path to a listing on the Canadian Securities Exchange (CSE).
The firm announced Wednesday that it’s pursuing an RTO of Randsburg International Gold (RGZ.H), an Ontario-based firm that has no significant operations but is listed on the CSE.
The deal, which is subject to shareholder and CSE approval, is expected to close by mid-November, according to a press release.
RTOs, which often include a takeover of a public shell company, has become the go-to path for U.S. cannabis firms looking to tap into Canada’s public markets.
Los Angeles-based MedMen and Chicago-based Green Thumb Industries completed RTOs in Canada earlier this year.
A slew of other companies also have announced RTO plans including:
Colorado’s MJardin
Oakland-based Harborside
LivWell Enlightened Health of Denver
4Front Holdings of Phoenix
Cresco Labs’ pursuit to go public follows its recently closed $100 million funding round – the second-largest deal inked in the U.S. marijuana industry to date, behind only New York-based Acreage Holdings’ $119 million raise in July.
Launched three years ago in Illinois, Cresco Labs also has operations in Arizona, California, Nevada, Ohio and Pennsylvania.
That is correct, we are currently OTC grey market and moving up to the OTCQX, hopefully in the next couple of weeks. Our main listing is on the Canadian Stock Exchange under ticker EPW.
The company is currently implementing a US national CBD strategy to license, distribute, and sell our own branded CBD products.
We also have a patient database of over 120k patients in Washington and Oregon and have a flagship clinic in Chicago. We also have plans to open clinics state by sate employing an M&A strategy by combining groups of clinics and operating them under the Empower brand.
The company is also looking to JV with operators and license holders in various stages to integrate the grow, distillate, product, and clinic/dispensary market. We call this the seed to sale model.
Please let me know if you have any further questions.
Regards,
Steven
-------- Original Message -------- Subject: OTC From: "JohnCM" Date: Sat, October 06, 2018 8:29 pm To: <mark@pointerpr.com> Empower Clinics OTC ticker currently grey sheet?
$CIIX Cannabidiol (hereinafter referred to as CBD) industry. The company focuses on investing in research and development to produce CBD drugs and nutritional supplements to help patients with epilepsy, Alzheimers neuropathy out of the pain. Our company has established Chinese CBD online store to provide CBD nutrition, cosmetics and health care products and their wholesale and retail services. http://www.chinesecbdoil.com/english/about-us.chtml
CBD oil is gaining popularity in North America and is considered a food nutrient delivering the benefits of cannabinoids without the psychotropic effects of THC. It has already been legalized in the 50 states of the U.S., and can also be exported to more than 40 countries including China.
$CIIX Cannabidiol (CBD) is one of the most important healing substances in the hemp plant with a strong anti-inflammatory effect without a psychotropic (narcotic) effect.
Namaste Technologies fires back at Andrew Left: misleading, defamatory and unfair
04 Oct 2018
Short-seller Andrew Left of Citron Research published a report that claims Namaste Technologies is a fraud
Namaste Technologies fires back at Andrew Left: misleading, defamatory and unfair
Sean Dollinger, CEO of Namaste Technologies
Namaste Technologies Inc (CVE:N) fired right back at Andrew Left of Citron Research late Thursday, after the short-seller published a seven-page report earlier that claims the cannabis company is a fraud.
The report suggested that if Vancouver-based Namaste was a US company, its shares would be halted, and its CEO would face charges.
Proactive Investors took an exclusive call with Sean Dollinger, CEO of Namaste earlier this morning, and he was remarkably candid about Andrew Left's accusations and responded to them.
He did have some words of advice and comment, much of which cannot be repeated here, due to the company's current quiet period. However, the company did put out a statement later in the day.
"Further to the article recently published by Citron Research, which made several false and defamatory accusations, we would like to note several key points in relation to the contents of the article. As you are fully aware, the article contains several misleading, defamatory and unfair characterizations of our company."
"The company has disclosed its intention to cross-list its securities on the NASDAQ stock exchange in the US. It has been clear that the company meets many of the requirements to cross-list, but does not meet the required share price threshold. Namaste has engaged with counsel to submit its application to the NASDAQ which is presently in progress and the exchange has already begun to review and provide comments on the application. The company will continue to pursue the cross-listing as intended," the company said in a statement.
I'm just taking a long investor view on sunniva and really don't care where it goes on the way to my target. I see that massive, and I mean massive grow coming together nicely.
Going from not growing to growing 13 football fields, or whatever that is there, will be a significant increase in revenue and value.
Same for the Canada campus which is just getting started.
Totally a dog right now and seems to get no love. Kinda like PAT at $1 after it had been $2.
Worst ever. Citron causes Investor Damages with fake news, then tries to trump up a lawsuit against the company for... wait for it... Investor Damages caused by the company's fake news.
all just to aid a short attack that citron admits to.
Classic citron/left tactics. Seen it before a thousand times.
Yet, it's quite often effective at least for the short term.
and they don't like it: "So after opening up the High Times IPO and taking a big sniff, it’s hard to believe it contains pungent smelling skunk buds. There are far more seeds and stems in that bag than we like so we’ll pass. With that said, the amount of irrational exuberance we’ve seen around the whole marijuana theme has been mind boggling. Just be aware that if this IPO happens and the stock price jumps 100% on opening day, that’s not indicative of future performance. The High Times Holding Group has a long road ahead of them if they hope to get out of the red and into the black by both increasing revenues and decreasing costs, all while making sure they continue paying interest on all that debt they’ve accumulated."
Cannabis Industry's Most Recognized Consumer Packaged Goods Brand Going Public, Expanding Global Operations
Denver-based Dixie Brands, Inc. Targets Going Public On the Canadian Securities Exchange In October, Plans Significant Expansion
DENVER, Oct. 1, 2018 / -- Dixie Brands, Inc. (Dixie) signed a definitive merger agreement on September 28, 2018 in connection with its proposed public listing on the Canadian Securities Exchange (CSE). Pending approval from the CSE, Dixie will complete a reverse takeover (RTO) of a Canadian public company, Academy Explorations Limited (Academy) and will be subsequently renamed Dixie Brands (USA) Inc. Both Academy and Dixie have received board and shareholder approval for the RTO. As a result, Dixie will boast the largest global footprint of infused product manufacturing and distribution facilities of any brand in the cannabis space. "The Federal legalization of marijuana in Canada is further proof that cannabis is no longer a fringe conversation or product. By going public on the CSE, we're investing in Dixie's future for continued growth with a focus on quality, product innovation and scale," says Dixie CEO Chuck Smith.
Simultaneously with the finalization of the documents in connection with the RTO, Dixie closed its Series C fundraising round of approximately $25 million. The Series C round was originally offered as a non-brokered private placement for $20 million, however, due to positive investor demand, Dixie increased the maximum offering amount to $25 million with board and shareholder approval.
"The financing round we have just closed will provide resources for Dixie to expand our brand throughout the U.S. and into Canada," Smith states. "Dixie has been a leader in the cannabis industry since its inception. We have nine years of experience developing intellectual property and building a brand that creates an incredible platform for our company and shareholders. We look forward to providing the same safe, high quality, and consistent product to patients and adult-use consumers throughout the U.S. and Canada."
Dixie is currently operating in four states (Colorado, California, Nevada, and Maryland) and has international distribution and manufacturing partners in Australia and Canada. Dixie plans to expand into four to six additional states in 2019 through partnerships with licensed and regulated producers in each state. Already the owner of the largest award-winning, THC-infused product line in the industry, Dixie has recently expanded its hemp-based offerings by introducing Aceso Wellness, a human dietary supplement line, and Therabis, a pet food supplement portfolio, at the end of 2016. These highly regarded products are available through brick-and-mortar locations and e-commerce in all 50 states, and internationally. As a result of the additional capital recognized by the Series C raise and future access to capital in the public markets, Dixie will expand its controlled manufacturing and distribution footprint throughout the U.S., and invest in automated production to increase manufacturing scale and efficiency. Additionally, Dixie will invest in continued product innovation and development in line with mainstream consumer trends and ever-increasing demand from wide ranging demographics.
The New Frontier in Canada
A recent parliamentary vote in Canada legalized marijuana across the country. In 2018, Dixie entered into a Canadian license agreement with Auxly Cannabis Group Inc. (Auxly), a vertically integrated global cannabis company. Under the agreement, Auxly will work closely with the Dixie team to co-develop innovative products for the adult-use recreational Canadian market. Dixie products will be developed and manufactured at Auxly's wholly-owned Canadian-licensed dealer, Dosecann Inc., a company led by a world-class team of food scientists, extraction specialists and product innovators. Dosecann operates out of a 42,000 square foot facility, purposebuilt for extraction and the research, development and manufacturing of cannabis products. Dosecann is located in the BioCommons Research Park in Charlottetown, PEI where it benefits from the thriving biotech community that PEI has attracted over the past decade. Dosecann will serve as Dixie's hub of cannabis research and innovation. Dixie's House of Brands Dixie started with a single product, the Dixie Elixir, a THC-infused soda, and now offers more than 30 different categories across more than 100 individual products – one of the broadest THC product lines in the industry. The award-winning company is a trailblazer in the rapidly expanding and evolving cannabis landscape. Brands that are distributed under the Dixie Brands umbrella include:
• Dixie, our namesake line that includes premium and award-winning THC-infused beverages, confections, concentrates, tinctures, and topicals • Synergy, a variety of THC-infused products which also harnesses the benefits of CBD, the cannabinoid most often hailed for its anti-anxiety and anti-inflammatory benefits • Mindset, an array of connoisseur-grade combustible cannabis products including concentrates, pre-rolls, and flower • Dr. Stash, a price-centered brand that focuses on scalable products that have the ability to quickly be brought to market In 2016, Dixie launched two new standalone brands to harness the benefits of CBD, a nonpsychoactive compound found in hemp that is commonly hailed for its anti-anxiety and anti-inflammatory benefits: Therabis and Aceso Wellness. Both the Aceso and Therabis brands have been sold through traditional retail and online since their inception. • Aceso, a suite of "hemp 2.0" products designed to provide general wellness and relief from minor aches and pains as well as combat mild-anxiety • Therabis, an all-natural hemp-based pet supplement formulated in conjunction with an experienced veterinarian and designed to provide pets with relief from itching and mildanxiety as well as providing greater joint mobility Education, Quality & Innovation
Dixie has established itself as the trusted source for innovative, safe, effective and delicious cannabis products, leading to features on 60 Minutes, CNBC, MSNBC, Fast Company and many more. The company is built and managed as a commercial food manufacturer with years of standard operating procedure development and unmatched scaling capabilities. Dixie handcrafts every product with pure-extracted THC and exceeds mandated regulation by triple lab testing every product. The company boasts extensive expertise in emulsification, formulation, packaging and regulatory compliance. Additionally, Dixie leads the way in working with legislators at the state and national level, driving reform and educational initiatives, as well as serving as founding members of Colorado Leads, the New Federalism Fund and the Cannabis Trade Federation.
A listing statement with information about Dixie and prepared in accordance with the policies of the CSE will be available on SEDAR at sedar.com. The merger agreement will also be posted on SEDAR on Academy's home page.
To find out more about Dixie's innovative products, or about how Dixie is building the future of cannabis, please visit us at dixiebrands.com.
Denver-based Dixie Brands, Inc. Targets Going Public On the Canadian Securities Exchange In October, Plans Significant Expansion
DENVER, Oct. 1, 2018 /PRNewswire/ -- Dixie Brands, Inc. (Dixie) signed a definitive merger agreement on September 28, 2018 in connection with its proposed public listing on the Canadian Securities Exchange (CSE). Pending approval from the CSE, Dixie will complete a reverse takeover (RTO) of a Canadian public company, Academy Explorations Limited (Academy) and will be subsequently renamed Dixie Brands (USA) Inc.
Both Academy and Dixie have received board and shareholder approval for the RTO. As a result, Dixie will boast the largest global footprint of infused product manufacturing and distribution facilities of any brand in the cannabis space.
"The Federal legalization of marijuana in Canada is further proof that cannabis is no longer a fringe conversation or product. By going public on the CSE, we're investing in Dixie's future for continued growth with a focus on quality, product innovation and scale," says Dixie CEO Chuck Smith.
Simultaneously with the finalization of the documents in connection with the RTO, Dixie closed its Series C fundraising round of approximately $25 million. The Series C round was originally offered as a non-brokered private placement for $20 million, however, due to positive investor demand, Dixie increased the maximum offering amount to $25 million with board and shareholder approval.
"The financing round we have just closed will provide resources for Dixie to expand our brand throughout the U.S. and into Canada," Smith states. "Dixie has been a leader in the cannabis industry since its inception. We have nine years of experience developing intellectual property and building a brand that creates an incredible platform for our company and shareholders. We look forward to providing the same safe, high quality, and consistent product to patients and adult-use consumers throughout the U.S. and Canada."
Dixie is currently operating in four states (Colorado, California, Nevada, and Maryland) and has international distribution and manufacturing partners in Australia and Canada. Dixie plans to expand into four to six additional states in 2019 through partnerships with licensed and regulated producers in each state.
Already the owner of the largest award-winning, THC-infused product line in the industry, Dixie has recently expanded its hemp-based offerings by introducing Aceso Wellness, a human dietary supplement line, and Therabis, a pet food supplement portfolio, at the end of 2016. These highly regarded products are available through brick-and-mortar locations and e-commerce in all 50 states, and internationally.
As a result of the additional capital recognized by the Series C raise and future access to capital in the public markets, Dixie will expand its controlled manufacturing and distribution footprint throughout the U.S., and invest in automated production to increase manufacturing scale and efficiency. Additionally, Dixie will invest in continued product innovation and development in line with mainstream consumer trends and ever-increasing demand from wide ranging demographics.
The New Frontier in Canada
A recent parliamentary vote in Canada legalized marijuana across the country. In 2018, Dixie entered into a Canadian license agreement with Auxly Cannabis Group Inc. (Auxly), a vertically integrated global cannabis company. Under the agreement, Auxly will work closely with the Dixie team to co-develop innovative products for the adult-use recreational Canadian market.
Dixie products will be developed and manufactured at Auxly's wholly-owned Canadian-licensed dealer, Dosecann Inc., a company led by a world-class team of food scientists, extraction specialists and product innovators. Dosecann operates out of a 42,000 square foot facility, purpose-built for extraction and the research, development and manufacturing of cannabis products. Dosecann is located in the BioCommons Research Park in Charlottetown, PEI where it benefits from the thriving biotech community that PEI has attracted over the past decade. Dosecann will serve as Dixie's hub of cannabis research and innovation.
Dixie's House of Brands
Dixie started with a single product, the Dixie Elixir, a THC-infused soda, and now offers more than 30 different categories across more than 100 individual products – one of the broadest THC product lines in the industry. The award-winning company is a trailblazer in the rapidly expanding and evolving cannabis landscape. Brands that are distributed under the Dixie Brands umbrella include:
Dixie, our namesake line that includes premium and award-winning THC-infused beverages, confections, concentrates, tinctures, and topicals Synergy, a variety of THC-infused products which also harnesses the benefits of CBD, the cannabinoid most often hailed for its anti-anxiety and anti-inflammatory benefits.
Mindset, an array of connoisseur-grade combustible cannabis products including concentrates, pre-rolls, and flower.
Dr. Stash, a price-centered brand that focuses on scalable products that have the ability to quickly be brought to market.
In 2016, Dixie launched two new standalone brands to harness the benefits of CBD, a non-psychoactive compound found in hemp that is commonly hailed for its anti-anxiety and anti-inflammatory benefits: Therabis and Aceso Wellness. Both the Aceso and Therabis brands have been sold through traditional retail and online since their inception.
Aceso, a suite of "hemp 2.0" products designed to provide general wellness and relief from minor aches and pains as well as combat mild-anxiety.
Therabis, an all-natural hemp-based pet supplement formulated in conjunction with an experienced veterinarian and designed to provide pets with relief from itching and mild-anxiety as well as providing greater joint mobility.
Education, Quality & Innovation
Dixie has established itself as the trusted source for innovative, safe, effective and delicious cannabis products, leading to features on 60 Minutes, CNBC, MSNBC, Fast Company and many more. The company is built and managed as a commercial food manufacturer with years of standard operating procedure development and unmatched scaling capabilities. Dixie handcrafts every product with pure-extracted THC and exceeds mandated regulation by triple lab testing every product. The company boasts extensive expertise in emulsification, formulation, packaging and regulatory compliance.
Additionally, Dixie leads the way in working with legislators at the state and national level, driving reform and educational initiatives, as well as serving as founding members of Colorado Leads, the New Federalism Fund and the Cannabis Trade Federation.
A listing statement with information about Dixie and prepared in accordance with the policies of the CSE will be available on SEDAR at sedar.com. The merger agreement will also be posted on SEDAR on Academy's home page.
To find out more about Dixie's innovative products, or about how Dixie is building the future of cannabis, please visit us at dixiebrands.com.
Media Inquiries Deborah Park, TURNER dixie@turnerpr.com / 303-333-1402
Dixie Brands, Inc. Charles Smith, Chief Executive Officer E-mail: csmith@dixiebrands.com
C.J. Chapman, General Counsel E-mail: cchapman@dixiebrands.com
Academy Explorations Limited Binyomin Posen, CEO and Director Telephone: (416) 481.2222 x 246 Email: bposen@plazacapital.ca
DENVER, Oct. 1, 2018 — Another U.S. cannabis company is listing on the CSE in a reverse-takeover (RTO) transaction. Dixie Brands, Inc. (Dixie) signed a definitive merger agreement on September 28, 2018 in connection with its proposed public listing on the Canadian Securities Exchange (CSE).
Pending approval from the CSE, Dixie will complete a reverse takeover (RTO) of a Canadian public company, Academy Explorations Limited (Academy) and will be subsequently renamed Dixie Brands (USA) Inc. Both Academy and Dixie have received board and shareholder approval for the RTO.
“The Federal legalization of marijuana in Canada is further proof that cannabis is no longer a fringe conversation or product. By going public on the CSE, we’re investing in Dixie’s future for continued growth with a focus on quality, product innovation and scale,” says Dixie CEO Chuck Smith.
Simultaneously with the finalization of the documents in connection with the RTO, Dixie closed its Series C fundraising round of approximately $25 million. The Series C round was originally offered as a non-brokered private placement for $20 million, however, due to positive investor demand, Dixie increased the maximum offering amount to $25 million with board and shareholder approval.
Dixie currently operates in four states (Colorado, California, Nevada, and Maryland) and has international distribution and manufacturing partners in Australia and Canada. Dixie plans to expand into four to six additional states in 2019 through partnerships with licensed and regulated producers in each state. In 2018, Dixie entered into a Canadian license agreement with Auxly Cannabis Group Inc. (Auxly). Under the agreement, Auxly will work closely with the Dixie team to co-develop innovative products for the adult-use recreational Canadian market.
Dixie products will be developed and manufactured at Auxly’s wholly-owned Canadian-licensed dealer, Dosecann Inc., a company led by a world-class team of food scientists, extraction specialists and product innovators. Dosecann operates out of a 42,000 square foot facility, purpose-built for extraction and the research, development and manufacturing of cannabis products. Dosecann is located in the BioCommons Research Park in Charlottetown, PEI where it benefits from the thriving biotech community that PEI has attracted over the past decade. Dosecann will serve as Dixie’s hub of cannabis research and innovation.
Dixie started with a single product, the Dixie Elixir, a THC-infused soda, and now offers more than 30 different categories across more than 100 individual products
Dixie Brands vs. Vireo Health: Which Marijuana Stock IPO Holds More Upside?
August 9th, 2018 iStock.com - Profit Confidential
Two Cannabis Companies Going Public
Marijuana companies are going public at a dizzying rate this year. Blink and you might miss an initial public offering (IPO). No need to worry though, because here’s some fresh information about two upcoming marijuana stock IPOs: Dixie Brands and Vireo Health Inc.
The former is headquartered in Denver and makes weed-infused beverages like lemonades and root beers. Meanwhile, the latter is a Minneapolis-based company with operations in three different states.
Both will (probably) go public as micro-cap stocks.
What’s great about these equities is that they would enter the market early in their life cycle, giving investors a shot at tremendous upside that’s usually reserved for private equity and venture capital.
We keep an eye out for these opportunities. Of course, not every marijuana penny stock is a gold mine. Some aren’t worth the transaction fees it takes to invest in them. But the few winners that come along are the ink with which rags-to-riches stories are written.
With that said, let’s review the two upcoming marijuana stock IPOs.
Vireo Health IPO
Outlook: Positive
First is the Vireo Health IPO. Vireo is a medical marijuana distributor with operations in New York, Pennsylvania, and Minnesota. (Source: “Vireo Health’s $17M Round Will Fund Expansion, 50 New Jobs in MN, IPO in Canada,” Twin Cities Business Journal, August 7, 2018.)
The company raised more than $16.0 million in its Series D funding round, which began on June 20. The initial goal of $12.0 million was increased to almost $17.3 million after Vireo received an unexpected influx of demand. The final tranche will close in the coming weeks.
After the funding round is complete, Vireo intends to spend it quickly on hiring hundreds of new staffers.
“We anticipate hundreds of jobs will be created under the Vireo Health umbrella over the next 36 months,” said spokesperson Andrew Mangini. “Vireo Health [also] intends to invest millions of dollars into existing markets.” (Source: Ibid.)
Scaling up is an important factor in the marijuana market right now. In fact, it might be the most important factor for Vireo, since it has an opportunity to carve up most of Minnesota’s burgeoning market for itself. At the moment, there’s one competitor in the region.
So, by acting quickly, Vireo could secure a revenue base that would finance future expansion. But that’s not all. The funding round also serves a second purpose: setting Vireo up for an IPO.
My guess is that the listing will take place on the Canadian Securities Exchange (CSE). We don’t have confirmation on that point yet, but that’s where all the marijuana stock IPOs have been taking place.
Dixie Brands IPO
Outlook: Positive, particularly as an acquisition target.
The first thing you should know about the Dixie Brands IPO is that it’s technically not an IPO. It is a reverse takeover (RTO). (Source: “Cannabis edibles maker Dixie Brands outlines plans to go public in Canada,” Marijuana Business Daily, July 26, 2018.)
Regular readers of Profit Confidential are probably familiar with this concept because we’ve covered MedMen Enterprises Inc (OTCMKTS:MMNFF, CNSX:MMEN) going public in a similar fashion.
For those in the dark, however, allow me to explain.
Dixie Brands finds a stock that’s listed on an exchange but isn’t really in use. (Its choice was Academy Explorations, a defunct mining company still occupying valuable a space on the CSE.)
Dixie then “buys” the public company that is underlying that stock (once again, Academy Explorations). The two companies merge, adopting Dixie Brand’s name and identity for the new business. Voila.
Dixie is listed on a stock exchange, no IPO hassles whatsoever. This approach is useful for companies going public in hurry. It avoids a ton of red tape. And, to be frank, it can save a sizeable amount of legal fees.
However, there are downsides to consider, such as poor transparency, weak reporting guidelines, and the inability to raise fresh capital. Dixie is taking over existing shares, not issuing new ones, so there’s no additional cash flowing into the firm’s coffers.
In order to get new funding, the company is holding its final private placement. It will raise somewhere between $12.0 million and $20.0 million, $2.0 million of which will come from a debt-to-equity swap.
Analyst Take
While both Dixie Brands and Vireo Health Inc. are promising, I think Vireo might be the safer option.
Why? Well, because unlike most marijuana stocks, Vireo Health comes from a small market: Minnesota. It can become the big fish there, then enter the ocean fully fed and ready for a fight. Meanwhile, its competition will have squandered millions of dollars on crumbs that, when expenses are tallied, won’t even yield a profit.
I’m clearly not the only person thinking along these lines. Why else do you think Vireo’s Series D funding was oversubscribed? Wall Street and the smart money are already there.
Don’t get me wrong though, Dixie Brands is also looking pretty good. The company is expected to produce $20.0 million in revenue in 2018 and $50.0 million in 2019. However, I don’t like Dixis’s debt-to-equity conversion, particularly in light of the RTO.
So, overall, I’m leaning toward Vireo Health stock.
Colorado Cannabis Company Dixie Brands to Go Public in Canada
July 26, 2018 at 10:23 am Published by NCV Newswire
Award Winning Cannabis Infused Products Company Dixie Brands to Go Public via Academy Explorations
TORONTO, July 26, 2018 (GLOBE NEWSWIRE) — Academy Explorations Limited (“Academy” or the “Company”) is pleased to announce that it has entered into a letter of intent (the “LOI”) dated July 26, 2018 with Colorado-based Dixie Brands, Inc. (“Dixie”) whereby the parties will complete a business combination by way of a transaction that will constitute a reverse takeover of the Company by Dixie (the “Transaction”). Pursuant to the Transaction, the Company will apply to list on the Canadian Securities Exchange (the “CSE”).
The resulting issuer that will exist upon completion of the Transaction (the “Resulting Issuer”) will change its business from mining to the cannabis industry and intends to apply for listing of its common shares on the CSE. The final structure of the Transaction will be determined by the parties following receipt of tax, corporate and securities law advice and is subject to the approval of the CSE. The Transaction is an arm’s length transaction.
Upon the closing of the Transaction (the “Closing”) and after giving effect to the maximum Private Placement and the Debt Conversion (each defined below), it is expected that former shareholders of Dixie will hold approximately 95% of the common shares of the Resulting Issuer (the “Resulting Issuer Shares”) and current shareholders of the Company will hold approximately 5% of the Resulting Issuer Shares (on a fully-diluted basis).
Dixie Brands, Inc. (“Dixie”) is a marketing, intellectual property and product development company designed to build and manage the expansion of the Dixie product portfolio worldwide. What started as a Dixie Elixir beverage in 2010, as part of the legal medical marijuana market in Colorado, has grown to be the first true national consumer package goods company in the cannabis industry.
Dixie has three portfolio companies under its umbrella: Dixie Elixirs & Edibles, Aceso Wellness (Hemp-derived CBD based human dietary supplement), and Therabis (Hemp-derived CBD based pet food supplement). The company currently operates in four U.S. states with an aggressive expansion plan for 2019. Dixie has also executed a license agreement with Auxly Cannabis (“Auxly”) in May of 2018. This agreement permits Auxly to exclusively produce and distribute Dixie branded products throughout Canada.
Dixie’s expansion strategy will be to control manufacturing and distribution in all markets where it participates while simultaneously building a global brand known for its quality and efficacy.
Patent pending technology for Aceso and Therabis. Innovation:
Broadest portfolio of consumer product delivery systems. 11 delivery systems across over 100 Stock Keeping Units (“SKUs”). Manufacturing & Distribution:
By end of 2019, Dixie expects to have the broadest controlled manufacturing and distribution footprint of any brand in the U.S. cannabis market delivering a standardized, reliable, and consistent product to end consumers in all markets.
We are delighted to take the iconic Dixie Elixir, as well as our other consumer focused brands, to the public capital markets in order to bring these well recognized and highly rated products to enthusiastic consumers across the U.S., as well as to Canada and other international markets.
Chuck Smith, President and CEO of Dixie The Canadian capital markets have proved to be an important and critical source of growth funding for U.S. cannabis companies. We are preparing for and anticipate a Q4, 2018 public offering on the CSE which will fund revenue generating production, distribution and consumer marketing programs to support our global expansion.
Dixie’s respected industry profile generates consistent business development opportunities, including; celebrity brands, cannabis brands, and strategic expansion partnerships. The financial strength of the company will enable it to take advantage of more of these accretive deals.
Dixie Private Placement
Dixie intends to complete a private placement (the “Private Placement”) prior to Closing of Dixie Shares and warrants (“Dixie Warrants”) for aggregate gross proceeds of between US$12,000,000 and US$20,000,000, including the conversion of approximately US$2,000,000 of debt to be exchanged for Dixie common shares (“Dixie Shares”) at the same deemed value of Dixie as the Private Placement, at a price equal to the fully diluted equity capitalization of Dixie prior to the Private Placement valued at US$80,000,000. Each Dixie Warrant shall entitle the holder thereof to acquire one Dixie Share for US$13.95, at an approximate valuation of US$150,000,000, exercisable for one year.
Share Consolidation and Exchange of Securities
Pursuant to the terms of the LOI, the Company will effect a consolidation (the “Share Consolidation”) of its issued and outstanding common shares (the “Academy Shares”) prior to Closing on a 4:1 basis resulting in approximately 6,641,808 Academy Shares outstanding on a post-Share Consolidation basis. The 400,000 issued and stock options of Academy (“Academy Options”) will be consolidated into 100,000 Academy Options. Each Academy Option will be exercisable for one Academy Share at an exercise price of C$0.08 per share on a post-Share Consolidation basis until July 5, 2021.
In addition, the Company will, prior to Closing, create a new class of non-participating voting shares which will have the right to a single vote at meetings of the holders of Academy Shares but will have no right to dividends or assets on wind-up (those shares, the “NPV Shares”; the creation of those shares, the “NPV Share Creation”).
In accordance with the terms of the Transaction, the holders of the issued and outstanding shares of common stock in the capital of Dixie (the “Dixie Shares”) will be issued approximately 10.45 Academy Shares in exchange for every one (1) Dixie Share held immediately prior to the completion of the Transaction (the “Exchange Ratio). The deemed exchange price for the Academy Shares will be approximately C$1.00 per Academy Share, or such other price as permitted by governing regulatory bodies.
Outstanding convertible securities of Dixie (the “Dixie Convertible Securities”) will either automatically adjust in accordance with their terms such that, following the completion of the Transaction, the holders of Dixie Convertible Securities will acquire Resulting Issuer Shares, or will be replaced with equivalent convertible securities of the Resulting Issuer entitling such holders to acquire Resulting Issuer Shares on the same terms as the Dixie Convertible Securities that they will replace and, in each case, adjusted to reflect the Exchange Ratio and exchange price. Certain Dixie Convertible Securities held by the management team and employees will be exchanged for NVP Shares.
Academy Shareholder Meeting
Prior to the Closing, Academy will call a meeting of its shareholders for the purpose of approving, among other matters (collectively, the “Academy Meeting Matters”):
a change of name of the Company to “Dixie Brands Inc.” or such other name as is directed by Dixie and acceptable to applicable regulatory authorities effective upon Closing;
the Share Consolidation;
the NPV Share Creation;
an amendment to its articles of incorporation to remove its authorized class of special shares, of which there are presently none outstanding; the approval of a new stock option plan to be effective upon Closing; the election of a slate of directors appointed by Dixie, which elections will be effective upon Closing;
the appointment of a new auditor; and if required by governing regulatory bodies, the approval of the Transaction.
The Transaction is an arm’s length transaction. Academy will, however, prepare and file with the CSE a CSE Form 2A listing statement or other principal disclosure document (the “Listing Statement”) providing comprehensive disclosure on Dixie and the Transaction in connection with the CSE listing.
Management of the Resulting Issuer
Upon closing of the Transaction, all of Academy’s current directors and executive officers will resign and the board of directors of the Resulting Issuer will, subject to the approval of governing regulatory bodies, consist of between 3 and 7 directors, each of which shall be appointed by Dixie in its sole discretion. All of the executive officers shall be replaced by nominees of Dixie, all in a manner that complies with the requirements of governing regulatory bodies and applicable securities and corporate laws.
Details of insiders and proposed directors and officers of the Resulting Issuer will be disclosed in a further news release.
Closing Conditions
The completion of the Transaction is subject to a number of conditions, including but not limited to the following:
the execution of a definitive agreement;
completion of mutually satisfactory due diligence;
completion of the Academy Meeting Matters; and receipt of all required regulatory, corporate and third party approvals, including approvals by governing regulatory bodies, the shareholders of Academy, applicable U.S. governmental authorities, the CSE and the fulfilment of all applicable regulatory requirements and conditions necessary to complete the Transaction. Further information
Further details about the Transaction and the Resulting Issuer will be provided in a comprehensive news release when the parties enter into the definitive agreement.
Investors are cautioned that any information released or received with respect to the Transaction in this press release may not be complete and should not be relied upon. Trading in the common shares of the Company should be considered highly speculative.
The securities to be issued in connection with the Transaction have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons (as defined in Regulation S promulgated under the U.S. Securities Act) unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
Completion of the Transaction is subject to a number of conditions, including but not limited to, CSE acceptance and if applicable, disinterested shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular or Listing Statement to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Academy should be considered highly speculative.
Neither the CSE nor its Regulation Services Provider (as that term is defined in the policies of the CSE) accepts responsibility for the adequacy or accuracy of this release.
About Academy Explorations Limited
Academy Explorations Limited previously operated as a mineral exploration company but presently has no current activities or operations.
About Dixie Brands, Inc.
Dixie Brands, Inc., which has been formulating award-winning THC and CBD-infused products since 2009, is expecting to double its manufacturing and distribution capabilities in 2019 in the US as well as expand internationally, including Canada. They lead the global industry in the development, packaging design, product innovation and quality control for the commercial production of cannabis infused products. While the company started with a single flagship product, the Dixie Elixir (a THC-infused soda), it is now one of the industry’s most recognized consumer brands, expanding to over 100 products across more than 30 different product categories representing the industry’s finest edibles, tinctures, topicals and connoisseur grade extractions, as well as world-class CBD-infused wellness products and pet dietary supplements. Dixie’s executive team has been instrumental in the formation of the marijuana industry for recreational and medicinal use, serving as founding members on several national regulatory and business-oriented industry organizations. To find out more about Dixie’s innovative products, or about how Dixie is building the future of cannabis, visit www.dixiebrands.com.
Planet 13 is a newly listed (on the Canadian Stock Market) vertically integrated holding company with HUGE intentions of being The Most Outrageous Cannabis Dispensary in Las Vegas. Operations are progressing to have Grand Opening approximately November 1st, 2018.
Well you can't really go wrong there. Been squirreling shares of that pig for awhile now, only a matter of time. It has been the gift that keeps on giving. Hopefully it starts to gain some traction again soon!
Canada is set to flip the switch for legal sale of recreational marijuana in just a few weeks.
Marijuana stocks are taking center stage ahead of Canada's legalization so investors should be aware of the risk/reward ahead.
There are new marijuana stocks that have been quietly attracting investor interest while companies like Tilray & Canopy Growth flood the mainstream media.
New marijuana stock IPO's ahead could further offer investment opportunities beyond the "go to list" of pot stocks.
We’re now weeks away from the big day that many have been waiting for months now. Canada is about to legalize the recreational sale of marijuana across the country, which not only opens an opportunity for the national market to grow but also opens the door to international trade in places like Australia and Germany.
Cannabis companies are already building out global distribution channels with market leaders cutting deals and taking on strategic investments to further enhance their product offerings. One trend that appears evident is that “normal companies” are now getting involved in the sector.
We saw a little glimmer of this last year when Constellation Brands (STZ) threw its hat in the ring with a small stake in Canopy Growth (CGC)(WEED). This small stake turned into a considerable investment into the legal cannabis industry as Constellation went further by investing some $4 billion into the cannabis producer this year.
We also saw other companies like Molson Coors (TAP) make a run at legal weed with its joint partnership with The Hydropothecary Corporation (OTCPK:HYYDF). The deal has beer marker, Molson Coors taking charge with a more than 50% controlling interest.
"Canada is divulging new ground in the cannabis sector and, as one of the country's leading beverage companies, Molson Coors Canada has a unique opportunity to participate in this exciting and rapidly expanding consumer segment," said Frederic Landtmeters, president and CEO of Molson Coors Canada, in a statement regarding the deal.
What To Look For After Legalization
It’s no secret that marijuana mania is back and healthy in the stock market. The recent explosion of Tilray (TLRY) following its July IPO sparked much of the current awareness sector stocks are beginning to see. But ahead of this significant legalization event, investors should be looking at more than just hype-fueled equities. There are options like several ETF’s to take advantage of these market moves. However the pure-play may be a better bet. It’s just a matter of finding a good company that isn’t full of random hype or speculative trading.
Following legalization going live, investors should take note of a few unconventional things. The first being what the companies are doing. Are they focusing on expansion or are they “going with the flow” without any more effort? Logically speaking, a company that isn’t working to carve a true corner out of this market, that company should be enhancing their current offering.
Canopy Growth and Aurora Cannabis (OTCQX:ACBFF)(ACB) have already made it well documented that they are on the takeover trail. For starters, Canopy is already building a huge international footprint that includes brands like Spektrum Cannabis, Tweed, Entourage Phytolab and AusCann. These span across North America, South America, Europe, Africa, and Australia. The recently announced deal with OrganiGram Holdings (OTCQX:OGRMF)(OGI.V) is another step in the expansionary moves being made by the company. This event isn’t just about expanding the footprint; it’s also a telltale sign that Canopy is focused on mass market entry. Unlike other deals that it has done with companies like AusCann, the Organigram deal effectively allows Canopy to increase its fulfillment.
The Companies signed a two-year supply and distribution agreement for OrganiGram to supply Canopy with product in the Province of Newfoundland and Labrador. This isn’t just another brand takeover; it’s a strategic move to ensure that Canopy can meet demand. Organigram also has supply agreements/MOU’s with the provinces of New Brunswick, Nova Scotia, Prince Edward Island, Alberta, Manitoba, and Ontario, though this deal is currently just for Newfoundland and Labrador.
Also keep in mind that unlike other cannabis companies, Canopy is taking a page out of the script of many other companies that are leading in their respective industries and has created an investment company called Canopy Rivers; also publicly traded on the TSX Venture exchange.
Aurora Cannabis (OTCQX:ACBFF)(ACB) has taken a similar approach to Canopy in that it too is making strategic investments and setting up distribution agreements with numerous companies. To date, their M&A strategy has helped amass 15 companies – MedReleaf (OTCPK:MEDFF)(LEAF), CanvasRX, Peloton Pharmaceutical, Aurora Deutschland (formerly Pedanios), H2 Biopharma, Urban Cultivator, BC Northern Lights, Larssen Greenhouses, CanniMed Therapeutics, Anandia Labs, HotHouse Consulting, Agropro, Borela, and proposed acquisitions of ICC Labs.
They’ve also invested in established partnerships with many publicly traded cannabis companies including:
Radient Technologies Inc. (RTI.V)(OTC:RDDTF) Hempco Food and Fiber Inc. (HEMP.V) (OTC:HMPPF) Cann Group Ltd. (CAN.AX)(OTCPK:CNGGF) Micron Waste Technologies Inc. (CSE:MWM)(OTCPK:MICWF) Choom Holdings Inc. (CSE:CHOO)(OTCQB:CHOOF) Namaste Technologies Inc. (TSXV:N.V)(OTCQB:NXTTF) CTT Pharmaceuticals (OTCPK:CTTH) Alcanna Inc. (CLIQ.TO)(OTCPK:LQSIF)
Aurora has also made a point to get embedded into the growing hemp industry as well. The recent acquisition of Europe’s Agropro UAB, as well as hemp processor/distributor Borela UAB, gets them into the same asset class as Canopy. The significant difference between the two (besides price) is the share structure. Canopy has roughly 200 million shares outstanding while Aurora has nearly a billion shares outstanding (958.5 million). Despite the gross differences, Aurora may be a bit more nimble especially at its current valuation.
Indeed, you can’t argue the fact that Canopy has achieved a lot within the last 18 months, but Aurora is hitting on other angles and that “other angle” is growth rate. The company reported over 220% top-line growth rate in its revenue and a lot of that has been due to the strategic partnerships that the company has gotten involved with.
Management even highlighted the fact that MedReleaf operations were a highlighted contributor to its pro-forma Q4 revenue. As I highlighted in my article, “Alcohol Stocks Fighting To Stay Relevant In A Marijuana Stock Market?” I predicted that the wave of investment from other non-pot businesses was just getting started (and I took a little bit of heat from people in the alcohol world). Now, I’m suggesting that we’re likely to see that the next level of success will not only come from significant investment from outsiders like the Molson’s, Constellation’s, and potentially the Coke's (KO) and Pepsi’s (PEP) but once Canada flips that switch, we should begin to see the industry start to roll up a little bit.
We’ve already seen a little bit of this already with both Aurora and Constellation going directly to other public companies whether it be full buyouts or strategic investment that could result in a majority stake such as with Aurora and The Green Organic Dutchman. Health Canada is already anticipating that demand for marijuana will be substantially higher than what was initially expected.
A report commissioned by Health Canada used a 2017 federal survey on marijuana use to build a thesis and determine potential demand during the first year of legalization. The amount calculated: just under 930,000 kilograms for both recreational and medical use. It also looks like the company is ramping up to utilize their hemp business for CBD production as well as the general “industrial hemp” products in the arsenal.
This is 41% higher than the original estimate of 655,000 kilograms arrived at by the Parliamentary Budget Officer in 2016. With expected demand outpacing supply already, it will be important (as I said above) to focus on companies that are building a runway around growth because anyone standing still in this market especially right now will inevitably get left behind.
New Kids On The Block
But just because companies like Aurora and Canopy growth are rapidly expanding, it doesn’t mean that there isn’t any more hope for new entrants in the space. Some companies seem to have completely flown under the radar. Take Trulieve Cannabis (OTCPK:TCNNF)(TRUL.C) for instance. The company recently went public on the Canadian exchange and is now dual-listed on the OTC as well. Trading volume has increased, and the price has followed.
The company operates many dispensaries (16) all across Florida. Revenue for the company grew from $15.2 million in the first quarter to $23.3 million in the second quarter of this year. Considering that Canopy Growth did just shy of $26 million in their most recent quarter, the revenue alone could put Trulieve on par with “the market leader.”
Also, according to Canopy’s earnings press release, “gross margin before the fair value impacts in cost of sales and other inventory charges would have been $16.5 million or 64% of sales.”
Trulieve’s gross margin, which does not include net-effect of change in fair value of biological assets, was 74.1% of revenue for its most recent quarter. On $23.3 million, that figure is just over $17 million.
Breaking it down by earnings figures and assuming nothing changes at all for either company, Canopy would end up somewhere in the ballpark of $103 million ($25.9million per quarter) and Trulieve would wind up at roughly $85 million taking into account the next two quarters of similar revenue and accounting for the first quarter revenue of $15.2 million. The reason I point this out is the multiples that these two companies trade at is night and day with Canopy trading at a far higher revenue multiple than Trulieve.
You’ve also got the recent entry of Pyxus International (PYX) coming online in September. The company itself has been relatively quiet and therefore, we have to go on what limited information there is right now. Here’s what we do know: Pyxus is the product of a name and symbol change from Alliance One International to Pyxus International. The company has some operating arms that include a play on hemp as well as the recent entry into the Canadian cannabis industry.
Pyxus’ FIGR Inc. via FIGR's subsidiary Goldleaf Pharm Inc. received its Access to Cannabis for Medical Purposes Regulations cultivation license from Health Canada. FIGR’s subsidiary additionally received approval from Health Canada for the sale of medical cannabis and oils while closing on a supply agreement in PEI (Prince Edward Island) for 1,000kg of cannabis products.
These developments put both of FIGR's two subsidiaries as companies that are now licensed to produce medicinal cannabis in Canada. Of course, this also gives the company a strong advantage when it comes to producing cannabis for recreational sale following the October 17 legalization date in Canada.
The attraction to this company could be compared to Tilray as far as share structure goes. As we’ve seen with Tilray, a “perfect storm” of buying in a low float environment creates some impressive movement in a stock. Fortunately and unfortunately for Pyxus, this has worked on both ends of the spectrum recently. There has been a decent run up to highs of almost $29 followed by the recent downtrend in price.
The one thing that is of interest in the company’s debt structure and by looking into the filings, investors will likely see that there $645.1 million face amount debt outstanding. This figure is after the purchases the company made in July. These included the purchase and cancellation of $10.9 million of its 9.875% senior secured second lien notes and an additional $7 million of debt. Though this debt is a concern, the fact that the company is utilizing surplus cash to boil down this outstanding debt should be a good sign for prospects in my opinion.
The company does do strong revenues with the last quarter reporting nearly $300 million representing year-over-year growth of 5.1%
On the company’s earnings call, company CEO, Pieter Sikkel, stated, “In industrial hemp, our joint venture Criticality is taking active steps to become a leader in the production of CBD hemp oil and related consumer products. We look forward to receiving and processing hemp at Criticality's facility in North Carolina this fall. Our e-liquids investments continued to demonstrate positive momentum. Last month, Fontem Ventures introduced Salt of the Earth, an additional product line that is a direct result of the relationship with our Purilum joint venture and utilizes Purilum's premium nicotine salt e-liquid.”
Sikkel continued, “And in legal cannabis, we are fast approaching the October 17 effective date for the legalization of recreational cannabis use in Canada. Our Canadian cannabis business is rapidly gearing up to meet expected consumer demand beyond the current legal medicinal market. As we discussed previously, construction work on an additional 310,000 square feet of greenhouse and warehouse space is underway as FIGR, our wholly-owned indirect Canadian subsidiary works toward its total goal of over 1 million square feet of production in that market.”
I've covered other companies on Seeking Alpha before they went public and the story was something along the line of raising significant capital, having a unique product and attracting the attention of companies like Aurora Cannabis for strategic investments. Now, it would appear that it’s coming down to company performance versus solely generating capital-interest from investors. Pyxus has a business history of more than 100 years essentially making it the oldest cannabis company in the space right now, and Trulieve has built a revenue machine to drive sales growth that has now proven to be a scalable model.
Marijuana Stock IPO’s To Note
In addition to these new players, we still have some marijuana stock IPO’s to look forward to. Curaleaf Inc., which is based in Massachusetts, is going to go public in Canada and hopes to raise capital with an ultimate pre-offering valuation between $3 billion and $4 billion. The company is going public through a reverse takeover following the combination of Canada’s Lead Ventures Inc. with PalliaTech Inc. in August. This type of going public transaction isn’t new to the markets either. MedMen (MMEN)(OTCQB:MMNFF), Green Thumb Industries (OTCPK:GTII)(OTCQX:GTBIF) and others have taken this route to get in on the public pot stock action.
In fact, with some who are concerned with a “high valuation,” remember that this new cannabis market is starting to see its fair share of billion-dollar listings. MedMen Enterprises’s went public in Canada with a $1.65 billion valuation and leading into its IPO; Green Thumb also joined the billion-dollar valuation club.
There’s also the heavily watched High Times IPO coming down the pipe. Right now the company is taking more of a crowdfunding approach to its going public event. They’re accepting a minimum of $99 from investors and raising money at $11 per share. The company is focusing on media, events and licensing for revenue growth and in doing so, High Times has already started down the path of M&A before its IPO. The company recently acquired DOPE Media, which included a magazine, website and events business for a little over $11 million. This adds to the stable of acquisitions following several other cannabis-related media properties like CULTURE and Green Rush Daily.
Across “the pond” there will also be the StenoCare IPO. The company will be the first cannabis company in Europe to get in on the growing interest for marijuana stocks. The company is only looking to raise about $3 million on Copenhagen’s Spotlight exchange and will give a pre-money valuation of roughly $9.3million according to the company’s PR covering the IPO. Investors can look for this to begin trading around October 24 with the short name of STENO. The company is in the consumer products side of the business with current offerings including CBD Drops STENOCARE, THC Drops STENOCARE and 1:1 Drops STENOCARE
Still, Investors Should Be Cautious
Never forget the first cannabis stock boom. The “FOMO” is real, especially with so much excitement and it’s easy to lose track of investment strategies. Make sure to pay close attention to balance sheets on companies in the space as a number of them still leave much to be desired. In some cases, the markets are rallying right now as momentum is building across the sector. The share structures, more than anything, are a big plus for traders in my opinion.
Many marijuana stocks are trading well over their float and in some cases their entire outstanding share count on a daily basis. This means the turnover of the float mixed with the periodic short squeezes makes these optimal targets for technical traders I’m sure. But in the long run, as I’ve mentioned throughout this article, the biggest successes will most likely come from those companies focused on the longevity of a business.
Lately, the excitement has buzzed around cannabis-infused beverages especially after reports suggested Coca-Cola may be getting into the game.
The Securities and Exchange Commission has issued an investor alert warning investors about the potential pitfalls of companies that may be overpromising returns to their investors, “Fraudsters may manipulate stock prices (for example, causing them to rise or fall dramatically) by spreading false and misleading information about a company…Microcap stocks, some of which are penny stocks and/or nanocap stocks, may be more susceptible to market manipulation than stocks of larger companies.”
Focus On The Topic At Hand
No one can stop what’s about to happen in Canada. The country will be the benchmark used by other countries like the United States. The DEA has already gone ahead and rescheduled CBD to Schedule V instead of Schedule I. Specifically the agency said that this applies to “FDA-approved drugs that contain CBD derived from cannabis and no more than 0.1% tetrahydrocannabinols.” This was in response to the drug Epidiolex from GW Pharmaceuticals (GWPH).
Though some think that this may be just another “side project for the DEA,” it could open up some doors for CBD in its entirety to be rescheduled or potentially de-scheduled. The scheduling change could also allow access to medical researchers looking at CBD applications beyond epilepsy treatments.
Marijuana legalization is now weeks away for one country, and support for the drug continues to grow across the globe. Despite the potential shortcomings that are typically seen with any industry seeing massive excitement, investors could also have a significant opportunity to take advantage of the end to cannabis prohibition. New IPO’s and a robust M&A climate may add to this opportunity as well. Investors should be well aware of all of the reasons why certain cannabis stocks move the way they do and trade/invest accordingly.
MediPharm Labs Corp. (TSXV: LABS) (Formerly POCML 4 Inc.) Provides Corporate Update Upon Commencement of Trading on the TSXV
TORONTO, Oct. 04, 2018 (GLOBE NEWSWIRE) -- MediPharm Labs Corp. (TSXV: LABS) (“MediPharm Labs” or the “Company”) (formerly POCML 4 Inc.; TSXV: POCM) is pleased to provide a corporate update to highlight its achievements and ongoing activities upon the commencement of trading of its common shares on the TSX Venture Exchange (the “TSXV”) on October 4, 2018 under the ticker symbol “LABS”.
MediPharm Labs is a medicinal cannabis company specializing in the pharmaceutical grade production of cannabis oil products as a Licensed Producer by Health Canada under the Access to Cannabis for Medical Purposes Regulations (ACMPR), and is the first company in Canada to become a Licensed Producer for cannabis oil production without first receiving a cannabis cultivation license. MediPharm Labs is research-driven and focused on downstream secondary extraction methodology, distillation, and cannabinoid isolation and purification. This expert focus on cannabis concentrates under cGMP (current Good Manufacturing Practices) standards utilizing ISO rated standard clean rooms and critical environment laboratories, allows MediPharm Labs to work with Health Canada approved cultivation partners to produce pharmaceutical grade cannabis oil with a proprietary and competitive advantage.
“Our public listing marks a tremendous milestone for MediPharm Labs and will allow us to further enhance our position as an industry leader in the production and supply of pharmaceutical grade extracted cannabis products in Canada and globally, backed by our diverse team of highly sophisticated and accomplished professionals,” stated Patrick McCutcheon, Chief Executive Officer of the Company.
MediPharm Labs has curated a unique position in the cannabis industry by exclusively focusing on the high-margin segment of extraction and extraction related activities based on its proprietary methodologies and relationships. Purified cannabis concentrates have emerged as a preferred basis for consumption and is also the critical element for isolate and infused products for both the medical and adult use markets where legal globally. Leveraging the Company’s specialized methodologies and existing purchase and extraction arrangements with innovative and well-established industry participants. MediPharm Labs has been actively building an inventory of specialized consumer products in anticipation of federal legalization of the adult-use market in Canada. As a trusted specialized extractor and approved supplier of the Ontario Cannabis Stores, MediPharm Labs is well positioned to be a leader in this emerging market. Outside of the Canadian market, the Company is advancing the development of MediPharm Labs Australia facility, which will be a purpose-built state of the art centre of excellence and strategic component of the Company’s international growth strategy, in addition to developing strategic arrangements with industry leaders around the globe.
Operational Update
Phase one build-out of the Company’s critical environment labs utilizing state-of-the-art customized cannabis extraction, fractionation and distillation equipment has been completed in the Company’s wholly-owned cGMP pharmaceutical facility, complete with purpose built laboratory and manufacturing equipment fully executing the Company’s proprietary processes.
The Company is currently operating with a processing capacity of 100,000 kilograms of dry cannabis flower and/or trim per year, giving MediPharm Labs one of the largest extraction capacities in Canada. Fully funded expansion underway to increase customized processing capacity to an expected 250,000 kilograms of dry cannabis per year by Q2 2019. Executed cannabis concentrate program agreements in place with Licensed Producers James E. Wagner, Bonify, INDIVA and UP Cannabis/Newstrike Brands Ltd., with further arrangement in process with additional Licensed Producers and industry participants, subject to standard conditions for such arrangements including receipt of requisite licenses.
Completed numerous bulk wholesale purchases from various Licensed Producers to bolster inventory in preparation for federal legalization of the adult-use market.
Named as one of only 32 Licensed Producer suppliers for the Ontario Cannabis Stores.
Positioned to generate revenue immediately upon receipt of sales licence (sales inspection has been completed and pending approval).
MediPharm Labs has rights and plans to open four retail stores in the province of Manitoba in 2019 through its Joint Venture Partnership “Garden Variety” with Avana Canada Inc. of Ontario, Fisher River Cree Nation of Manitoba, Chippewas of the Thames of Ontario.
Research-driven, bio-pharmaceutical team established as lead by Dr. Chris Talpas, chromatography expert.
MediPharm Labs Australia PTY facility, which will be a purpose built state-of-the-art extraction facility designed to produce the same superior pharmaceutical grade cannabis oil as the Company’s purpose-built Health Canada licensed cannabis oil production facility in Barrie, Ontario is under development and is anticipated to be operational in spring 2019 pending licensing. MediPharm Labs’ Australian facility in Wonthaggi is expected to serve both the Australian domestic market as well as facilitate international supply chain and logistics opportunities, subject to receipt of applicable licenses.
Development of additional specialized intellectual property, focused on downstream proprietary fractionation, isolation and chromatography underway. Advanced activities underway targeting strategic partnerships, development of proprietary products and international opportunities. For additional information on MediPharm Labs please visit www.medipharmlabs.com.
PowerOne Capital Markets Limited and Canaccord Genuity Corp. acted as agents to the Company for its financing in connection with the Company’s “Qualifying Transaction” with POCML 4 Inc., as such term is defined in the policies of the TSXV (the “Transaction”).
Directors, Officers and Auditor
The directors and officers of the Company following closing of the Transaction are:
Patrick McCutcheon, President and Chief Executive Officer and Director - In his 15 years in the pharmaceutical industry, Pat has successfully launched a wide range of medicinal products. Before arriving at MediPharm, Pat most recently led the hospital division for renal and mental health products for Jansen Pharmaceuticals (Johnson & Johnson).
Keith Strachan, Vice President, Business Development and Director - Keith is a supply chain management expert and has held numerous positions in the public sector. With a focus on procurement, Keith has worked for ministries and agencies including correctional services, policing, transportation and healthcare.
Miriam McDonald, Director - Miriam is currently the Director of Pharmacy at Health Sciences North, Northern Ontario’s largest hospital located in Sudbury. She holds a Bachelor of Science in Pharmacy from the University of Toronto and a Master of Science in Pharmacology from Queens University. Her career has encompassed positions as the Executive Director of Community Development at the Northern Ontario School of Medicine, and CEO of the Northeastern Ontario Medical Education Corporation (NOMEC) wherein she worked throughout northern Ontario to facilitate community-based medical clinical education. She also served as Director of Planning and Development of Cambrian College, Executive Director of Cambrian Foundation, and Director of Pharmacy, Director of Rehabilitation Services and Assistant Executive Director of Therapeutic Services at Laurentian Hospital. She was Project Coordinator for the planning and construction of the Glenn Crombie Special Needs Centre, the Northern Centre for Advanced Technology (NORCAT), and the Northeastern Cancer Centre. She is the author and co-author of a number of health-related papers and studies and is very active in the community both on a personal and professional level.
Marufur Raza, Director - Maruf is one of the leaders of MNP LLP’s Access to Cannabis for Medical Purposes Regulation (ACMPR) team with a great depth of experience and expansive network in the industry internationally. Maruf is considered a thought leader in the practical application of the IFRS biological asset standard and measurement of fair value of the assets. He has experience with the medical marijuana sector internationally and has assisted with these companies listing in Canada. Maruf has helped numerous Canadian and international companies go public in Canada. He has worked around the globe, with a special focus on Latin America and Africa and specializes in helping finance these companies in Canada, either through public or private transactions. Maruf also serves as a strategic advisor to and private companies planning on going public through direct initial public offerings or reverse mergers.
Christopher Hobbs, Chief Financial Officer and Director - Chris has over 25 years of diversified finance and accounting experience with a focus on assisting growth companies raise capital and listing in Canada. Chris has acted as Chief Financial Officer for several public and private companies operating in the resource, health sciences and technology sectors. Chris is a Chartered Professional Accountant (CPA), qualifying as a Chartered Accountant (CA) in 1992 while at KPMG LLP and holds a Bachelors of Business Administration from the Schulich School of Business at York University.
In connection with the Transaction, the Company has appointed Dale Matheson Carr-Hilton Labonte LLP as auditor of the Company, replacing MNP LLP. There are no reportable events, including disagreements, consultations or unresolved issues, as such terms are defined in National Instrument 51-102 Continuous Disclosure Obligations.
About MediPharm Labs Corp.
MediPharm Labs, through its subsidiary, is a pioneer in the cannabis industry and has the distinction of being the first company in Canada to become a licensed producer for cannabis oil production under the Access to Cannabis for Medical Purposes Regulations (ACMPR) without first receiving a cannabis cultivation licence. This expert focus on cannabis concentrates from our cGMP (current Good Manufacturing Practices) and ISO standard clean rooms and critical environments laboratory, allows MediPharm Labs to work with its established, Health Canada-approved cultivation partners to produce pharmaceutical-grade cannabis oil with a competitive advantage. MediPharm Labs is research-driven and focused on downstream secondary extraction methodology, distillation, and cannabinoid isolation and purification. MediPharm Labs, through its subsidiary, provides B2B contract processing of cannabis to Canadian authorized licensed producers and appropriate international growers, supplying integrity-assured cannabis oil to qualified companies for sale under their own brand.
MediPharm Labs will supply raw materials, formulations, processing and packaging for the creation of ready-to-sell advanced derivative products. Through its subsidiary, MediPharm Labs Australia Pty. Ltd., MediPharm Labs has also completed its application process with the federal Office of Drug Control to extract and import medical cannabis products in Australia.
Cannabis Extracts Producer MediPharm Labs Debuts on the TSX Venture
October 4, 2018
Published by NCV Newswire
MediPharm Labs Corp. (TSXV: LABS) (Formerly POCML 4 Inc.) Provides Corporate Update Upon Commencement of Trading on the TSXV TORONTO, Oct. 04, 2018 (GLOBE NEWSWIRE) — MediPharm Labs Corp. (TSXV: LABS) (“MediPharm Labs” or the “Company”) (formerly POCML 4 Inc.; TSXV: POCM) is pleased to provide a corporate update to highlight its achievements and ongoing activities upon the commencement of trading of its common shares on the TSX Venture Exchange (the “TSXV”) on October 4, 2018 under the ticker symbol “LABS”.
MediPharm Labs is a medicinal cannabis company specializing in the pharmaceutical grade production of cannabis oil products as a Licensed Producer by Health Canada under the Access to Cannabis for Medical Purposes Regulations (ACMPR), and is the first company in Canada to become a Licensed Producer for cannabis oil production without first receiving a cannabis cultivation license. MediPharm Labs is research-driven and focused on downstream secondary extraction methodology, distillation, and cannabinoid isolation and purification. This expert focus on cannabis concentrates under cGMP (current Good Manufacturing Practices) standards utilizing ISO rated standard clean rooms and critical environment laboratories, allows MediPharm Labs to work with Health Canada approved cultivation partners to produce pharmaceutical grade cannabis oil with a proprietary and competitive advantage.
“Our public listing marks a tremendous milestone for MediPharm Labs and will allow us to further enhance our position as an industry leader in the production and supply of pharmaceutical grade extracted cannabis products in Canada and globally, backed by our diverse team of highly sophisticated and accomplished professionals,” stated Patrick McCutcheon, Chief Executive Officer of the Company.
MediPharm Labs has curated a unique position in the cannabis industry by exclusively focusing on the high-margin segment of extraction and extraction related activities based on its proprietary methodologies and relationships. Purified cannabis concentrates have emerged as a preferred basis for consumption and is also the critical element for isolate and infused products for both the medical and adult use markets where legal globally. Leveraging the Company’s specialized methodologies and existing purchase and extraction arrangements with innovative and well-established industry participants. MediPharm Labs has been actively building an inventory of specialized consumer products in anticipation of federal legalization of the adult-use market in Canada. As a trusted specialized extractor and approved supplier of the Ontario Cannabis Stores, MediPharm Labs is well positioned to be a leader in this emerging market. Outside of the Canadian market, the Company is advancing the development of MediPharm Labs Australia facility, which will be a purpose-built state of the art centre of excellence and strategic component of the Company’s international growth strategy, in addition to developing strategic arrangements with industry leaders around the globe.
Operational Update
Phase one build-out of the Company’s critical environment labs utilizing state-of-the-art customized cannabis extraction, fractionation and distillation equipment has been completed in the Company’s wholly-owned cGMP pharmaceutical facility, complete with purpose built laboratory and manufacturing equipment fully executing the Company’s proprietary processes. The Company is currently operating with a processing capacity of 100,000 kilograms of dry cannabis flower and/or trim per year, giving MediPharm Labs one of the largest extraction capacities in Canada. Fully funded expansion underway to increase customized processing capacity to an expected 250,000 kilograms of dry cannabis per year by Q2 2019. Executed cannabis concentrate program agreements in place with Licensed Producers James E. Wagner, Bonify, INDIVA and UP Cannabis/Newstrike Brands Ltd., with further arrangement in process with additional Licensed Producers and industry participants, subject to standard conditions for such arrangements including receipt of requisite licenses. Completed numerous bulk wholesale purchases from various Licensed Producers to bolster inventory in preparation for federal legalization of the adult-use market.
Named as one of only 32 Licensed Producer suppliers for the Ontario Cannabis Stores.
Positioned to generate revenue immediately upon receipt of sales licence (sales inspection has been completed and pending approval). MediPharm Labs has rights and plans to open four retail stores in the province of Manitoba in 2019 through its Joint Venture Partnership “Garden Variety” with Avana Canada Inc. of Ontario, Fisher River Cree Nation of Manitoba, Chippewas of the Thames of Ontario.
Research-driven, bio-pharmaceutical team established as lead by Dr. Chris Talpas, chromatography expert.
MediPharm Labs Australia PTY facility, which will be a purpose built state-of-the-art extraction facility designed to produce the same superior pharmaceutical grade cannabis oil as the Company’s purpose-built Health Canada licensed cannabis oil production facility in Barrie, Ontario is under development and is anticipated to be operational in spring 2019 pending licensing. MediPharm Labs’ Australian facility in Wonthaggi is expected to serve both the Australian domestic market as well as facilitate international supply chain and logistics opportunities, subject to receipt of applicable licenses.
Development of additional specialized intellectual property, focused on downstream proprietary fractionation, isolation and chromatography underway.
Advanced activities underway targeting strategic partnerships, development of proprietary products and international opportunities. For additional information on MediPharm Labs please visit www.medipharmlabs.com.
PowerOne Capital Markets Limited and Canaccord Genuity Corp. acted as agents to the Company for its financing in connection with the Company’s “Qualifying Transaction” with POCML 4 Inc., as such term is defined in the policies of the TSXV (the “Transaction”).
Directors, Officers and Auditor
The directors and officers of the Company following closing of the Transaction are:
Patrick McCutcheon, President and Chief Executive Officer and Director – In his 15 years in the pharmaceutical industry, Pat has successfully launched a wide range of medicinal products. Before arriving at MediPharm, Pat most recently led the hospital division for renal and mental health products for Jansen Pharmaceuticals (Johnson & Johnson).
Keith Strachan, Vice President, Business Development and Director – Keith is a supply chain management expert and has held numerous positions in the public sector. With a focus on procurement, Keith has worked for ministries and agencies including correctional services, policing, transportation and healthcare.
Miriam McDonald, Director – Miriam is currently the Director of Pharmacy at Health Sciences North, Northern Ontario’s largest hospital located in Sudbury. She holds a Bachelor of Science in Pharmacy from the University of Toronto and a Master of Science in Pharmacology from Queens University. Her career has encompassed positions as the Executive Director of Community Development at the Northern Ontario School of Medicine, and CEO of the Northeastern Ontario Medical Education Corporation (NOMEC) wherein she worked throughout northern Ontario to facilitate community-based medical clinical education.
She also served as Director of Planning and Development of Cambrian College, Executive Director of Cambrian Foundation, and Director of Pharmacy, Director of Rehabilitation Services and Assistant Executive Director of Therapeutic Services at Laurentian Hospital. She was Project Coordinator for the planning and construction of the Glenn Crombie Special Needs Centre, the Northern Centre for Advanced Technology (NORCAT), and the Northeastern Cancer Centre. She is the author and co-author of a number of health-related papers and studies and is very active in the community both on a personal and professional level.
Marufur Raza, Director – Maruf is one of the leaders of MNP LLP’s Access to Cannabis for Medical Purposes Regulation (ACMPR) team with a great depth of experience and expansive network in the industry internationally. Maruf is considered a thought leader in the practical application of the IFRS biological asset standard and measurement of fair value of the assets.
He has experience with the medical marijuana sector internationally and has assisted with these companies listing in Canada. Maruf has helped numerous Canadian and international companies go public in Canada. He has worked around the globe, with a special focus on Latin America and Africa and specializes in helping finance these companies in Canada, either through public or private transactions. Maruf also serves as a strategic advisor to and private companies planning on going public through direct initial public offerings or reverse mergers.
Christopher Hobbs, Chief Financial Officer and Director – Chris has over 25 years of diversified finance and accounting experience with a focus on assisting growth companies raise capital and listing in Canada. Chris has acted as Chief Financial Officer for several public and private companies operating in the resource, health sciences and technology sectors. Chris is a Chartered Professional Accountant (CPA), qualifying as a Chartered Accountant (CA) in 1992 while at KPMG LLP and holds a Bachelors of Business Administration from the Schulich School of Business at York University.
In connection with the Transaction, the Company has appointed Dale Matheson Carr-Hilton Labonte LLP as auditor of the Company, replacing MNP LLP. There are no reportable events, including disagreements, consultations or unresolved issues, as such terms are defined in National Instrument 51-102 Continuous Disclosure Obligations.
About MediPharm Labs Corp.
MediPharm Labs, through its subsidiary, is a pioneer in the cannabis industry and has the distinction of being the first company in Canada to become a licensed producer for cannabis oil production under the Access to Cannabis for Medical Purposes Regulations (ACMPR) without first receiving a cannabis cultivation licence. This expert focus on cannabis concentrates from our cGMP (current Good Manufacturing Practices) and ISO standard clean rooms and critical environments laboratory, allows MediPharm Labs to work with its established, Health Canada-approved cultivation partners to produce pharmaceutical-grade cannabis oil with a competitive advantage. MediPharm Labs is research-driven and focused on downstream secondary extraction methodology, distillation, and cannabinoid isolation and purification. MediPharm Labs, through its subsidiary, provides B2B contract processing of cannabis to Canadian authorized licensed producers and appropriate international growers, supplying integrity-assured cannabis oil to qualified companies for sale under their own brand.
MediPharm Labs will supply raw materials, formulations, processing and packaging for the creation of ready-to-sell advanced derivative products. Through its subsidiary, MediPharm Labs Australia Pty. Ltd., MediPharm Labs has also completed its application process with the federal Office of Drug Control to extract and import medical cannabis products in Australia.
Are you gonna pick some up? Do we have to call in trade like with Charlotte's? Been waiting a year for them to go public, do you think they will do well being an oil only processor, or just a momentum trade?
MediPharm Labs Corp. (formerly POCML 4 Inc.) Announces Closing of Business Combination With MediPharm Labs Inc. and Anticipated Trading Date of October 4, 2018
Oct 2, 2018 POCML 4 Inc. Files Filing Statement in Connection With Proposed Qualifying Transaction With MediPharm Labs Inc.; Expects to Commence Trading on TSXV Under the Ticker Symbol “LABS” on or About October 3, 2018
Sep 25, 2018 Up Cannabis Signs Supply Agreement with MediPharm Labs for Extraction
Sep 24, 2018 POCML 4 Inc. Receives Conditional Approval of Business Combination with MediPharm Labs Inc.
Sep 21, 2018 OCS Announces New Supply Agreements with Additional Licensed Producers and Accessory Suppliers
Sep 5, 2018 INDIVA Signs Cannabis Concentrate Program Agreement With MediPharm Labs
Sep 4, 2018 Cannabis Corporation Operating in Manitoba Announces Name and Four Locations
Aug 22, 2018 MediPharm Labs Continues to Strengthen Leadership Team for Growth
Aug 9, 2018 Pocml 4 Inc. Announces the Signing of Two Cannabis Concentrate Program Agreements by MediPharm Labs Inc.
Aug 8, 2018 Bonify Signs Cannabis Concentrate Program Agreement With MediPharm Labs Inc.
POCML 4 Inc. Files Filing Statement in Connection With Proposed Qualifying Transaction With MediPharm Labs Inc.; Expects to Commence Trading on TSXV Under the Ticker Symbol “LABS” on or About October 3, 2018
TORONTO, Sept. 25, 2018
POCML 4 Inc. (TSXV: POCM) (the “Company”) is pleased to announce that it has filed on SEDAR its filing statement dated effective September 24, 2018 (the “Filing Statement”) in connection with its proposed business combination with MediPharm Labs Inc. (“MediPharm”), which will result in a reverse take-over of the Company by the shareholders of MediPharm (the “Transaction”). Subject to satisfaction of all conditions and approvals, including the satisfaction of the conditions of the TSX Venture Exchange (the “TSXV”), the Transaction is expected to close on or about October 1, 2018. The Company expects that the common shares of the Company as they exist after closing of the Transaction will commence trading on the TSXV under the symbol LABS on October 3, 2018. For further information, please refer to the Filing Statement on SEDAR at www.sedar.com, as well as the press releases of the Company dated May 15, May 31, June 29, July 16, August 23, 2018 and September 21, 2018 available on SEDAR at www.sedar.com.
About MediPharm Labs Inc. Founded in 2015, MediPharm is a pioneer in the cannabis industry and has the distinction of being the first company in Canada to become a licensed producer for cannabis oil production under the Access to Cannabis for Medical Purposes Regulations (ACMPR) without first receiving a cannabis cultivation licence. This expert focus on cannabis concentrates from our cGMP (current Good Manufacturing Practices) and ISO standard clean rooms and critical environments laboratory, allows MediPharm to work with its established, Health Canada-approved cultivation partners to produce pharmaceutical-grade cannabis oil with a competitive advantage. MediPharm is research-driven and focused on downstream secondary extraction methodology, distillation, and cannabinoid isolation and purification. MediPharm provides B2B contract processing of cannabis to Canadian authorized licensed producers and appropriate international growers, supplying integrity-assured cannabis oil to qualified companies for sale under their own brand. In addition, MediPharm will supply raw materials, formulations, processing and packaging for the creation of ready-to-sell advanced derivative products.
MediPharm Labs Corp. (formerly POCML 4 Inc.) Announces Closing of Business Combination With MediPharm Labs Inc. and Anticipated Trading Date of October 4, 2018
TORONTO, Oct. 02, 2018
MediPharm Labs Corp. (formerly POCML 4 Inc., TSXV: POCM) (TSXV: LABS) (the “Company” or “MediPharm Labs”) is pleased to announce that it has closed its previously announced business combination (the “Transaction”) with MediPharm Labs Inc. (“MediPharm”).
The Post-Consolidation Shares (as defined below) of the Company are expected to commence trading on the TSX Venture Exchange (the “TSXV”) under the symbol “LABS” on October 4, 2018. As previously announced, the Transaction resulted in a reverse take-over of the Company by the shareholders of MediPharm and constituted the “Qualifying Transaction” of the Company as such term is defined in the policies of the TSXV.
The company now focuses on the business of MediPharm which provides contract processing and purification of cannabis to Canadian authorized licensed producers and appropriate international growers, and supplies pharma-grade cannabis oil to qualified companies for sale under their own brand, as well as supplying raw materials, product formulation and processing for the creation of ready-to-sell cannabis products.
“Our vision is to be an industry connector, unifying the value chain as a trusted partner to those focused on cultivating or endproduct manufacturing,” says Pat McCutcheon, CEO of MediPharm. “Our public company status adds to our established leadership in extraction.”
Prior to the completion of the Transaction, the Company filed articles of amendment to: (i) effect a name change from “POCML 4 Inc.” to “MediPharm Labs Corp.”; and (ii) effect a consolidation of its common shares on the basis of one (1) “new” common share (a “Post-Consolidation Share”) for every two “old” common shares then outstanding. The Transaction then proceeded by way of a three-cornered amalgamation pursuant to which MediPharm amalgamated with a wholly-owned subsidiary of the Company, and the Company acquired all of the issued and outstanding Class A common shares of MediPharm (the “MediPharm Shares”), in exchange for Post-Consolidation Shares on the basis of 12.68 Post-Consolidation Shares for every one MediPharm Share issued and outstanding (the “Exchange Ratio”). In addition, pursuant to the Transaction, all outstanding options, warrants and broker warrants to purchase MediPharm Shares were either exchanged for economically equivalent securities of the Company or have remained outstanding and now entitle the holders thereof to acquire equivalent securities of the Company in lieu of MediPharm on the same terms and conditions, in each case subject to adjustment in number and exercise price based on the Exchange Ratio.
There are now an aggregate of 96,866,628 Post-Consolidation Shares issued and outstanding (non-diluted), of which the former shareholders of the Company hold 5,000,000 Post- Consolidation Shares representing approximately 5.2%, and the former shareholders of MediPharm hold 91,866,628 Post- Consolidation Shares representing approximately 94.8%.
In addition, an aggregate of 33,214,619 Post-Consolidation Shares are reserved for issuance upon the exercise of outstanding convertible securities of the Company.
An aggregate of 41,654,733 Post-Consolidation Shares held by non-principal shareholders will be subject to seed share resale restrictions (each, an “SSRR”) pursuant to TSXV Policy 5.4 - Escrow, Vendor Consideration and Resale Restrictions. This includes 11,405,941 Post-Consolidation Shares in addition to the number disclosed in the Company’s filing statement dated as of September 24, 2018. SSRRs are TSXV hold periods of various lengths which apply where seed shares are issued to nonprincipals by private companies in connection with the Transaction.
The terms of the SSRRs are based on the length of time such Post-Consolidation Shares have been held and the price at which such shares were originally issued. In addition, an aggregate of 18,703,416 Post-Consolidation Shares held by principal shareholders, directors and officers will be held in escrow pursuant to TSXV Policy 5.4 - Escrow, Vendor Consideration and Resale Restrictions. The securities subject to escrow shall be released as follows: 25% will be released on the date of the Final TSXV Bulletin (the “Bulletin Date”); an additional 25% will be released on the date which is six months following the Bulletin Date; an additional 25% will be released on the date which is twelve months following the Bulletin Date; and the remaining 25% will be released on the date which is 18 months following the Bulletin Date. Upon completion of the Transaction, all directors and officers of the Company resigned and were replaced by nominees of MediPharm.
The board of directors of the Company is now comprised of Patrick McCutcheon, Keith Strachan, Christopher Hobbs, Maruf Raza and Miriam McDonald. The management of the Company is now comprised of Patrick McCutcheon (President and Chief Executive Officer), Keith Strachan (Business Development, Vice-President) and Christopher Hobbs (Chief Financial Officer).
About MediPharm Labs Corp.
Founded in 2015, MediPharm Labs is a pioneer in the cannabis industry and has the distinction of being the first company in Canada to become a licensed producer for cannabis oil production under the Access to Cannabis for Medical Purposes Regulations (ACMPR) without first receiving a cannabis cultivation licence.
This expert focus on cannabis concentrates from our cGMP (current Good Manufacturing Practices) and ISO standard clean rooms and critical environments laboratory, allows MediPharm Labs to work with its established, Health Canada-approved cultivation partners to produce pharmaceutical-grade cannabis oil with a competitive advantage. MediPharm Labs is research-driven and focused on downstream secondary extraction methodology, distillation, and cannabinoid isolation and purification. MediPharm Labs provides B2B contract processing of cannabis to Canadian authorized licensed producers and appropriate international growers, supplying integrity- assured cannabis oil to qualified companies for sale under their own brand.
In addition, MediPharm Labs will supply raw materials, formulations, processing and packaging for the creation of ready-to-sell advanced derivative products.
Through its subsidiary, MediPharm Labs Australia Pty. Ltd., MediPharm Labs has also completed its application process with the federal Office of Drug Control to extract and import medical cannabis products in Australia.
Canada's Leading Cannabis Extraction Outfit Is Set To Debut On The TSX Venture Exchange on October 4th
01/03/2018
MediPharm Labs (LABS.V) will commence trading tomorrow (Oct 4) on the TSX Venture Exchange under the symbol LABS and this is an opportunity we are very excited about. MediPharm is a company of firsts and was the first company in Canada to become a licensed producer for cannabis oil production under the ACMPR without first receiving a cannabis cultivation license.
2018 has been a banner year of MediPharm and we expect 2019 to be even more significant. The company has been executing at a very high level, leaving them well positioned to see massive growth going forward. MediPharm is a multi-faceted growth opportunity that is levered to the smokeless product market and has been executing flawlessly on previously announced initiatives.
A State-of-the-Art Cannabis Oil Operation
MediPharm has been seeing incredibly strong demand for its contract processing services and this is a burgeoning part of the business. We believe the strong demand is primarily due to the management team’s expertise and the state-of-the-art-facility that the company operates out of.
MediPharm is producing pharma-grade cannabis oil and concentrates out of a fully functional state-of-the-art 70,000 sq. ft. facility that has been constructed to cGMP standards with ISO rated clean rooms. The facility can currently process 100,000 kilograms of dry cannabis flower or trim per year; the largest extraction footprint in Canada.
Since the facility is being constructed to the most stringent standards, MediPharm will be able to export product to emerging markets all over the world. The standards of design and construction of the company’s facility are currently the most innovative and technically advanced in the Canadian cannabis industry. The ability to sell product all over the world significantly enhances the growth profile and the value proposition of the entire business.
When compared to other companies focused on the cannabis oil industry, MediPharm operates out of a facility that is second to none and this provides a significant competitive advantage. The company has made a $7 million investment in build-out of critical environment labs and the acquisition of state-of-the-art cannabis extraction, fractionation, and distillation equipment. MediPharm is positioned to benefit from this investment and has the ability to produce low cost, high quality cannabis oil.
The company is in the middle of a major expansion that will increase processing capacity to 250,000 kilograms of dry cannabis per year by the fourth quarter. This is a significant initiative and will lead to MediPharm reporting significantly stronger revenue numbers and are favorable on the continued execution.
One of the ways that MediPharm benefits from having a state-of-the-art facility and a proprietary extraction process is through the increased amount of cannabis oil that is produced. The combination of these factors allows MediPharm to extract a larger amount of cannabis oil from the same amount of input product. This is a testament to the company’s expertise and methodology when it comes to processing cannabis and is an attractive aspect of the growth potential.
Demand for smokeless cannabis products has been increasing rapidly and this is a trend that we expect to become more significant in 2019. We are seeing this trend play out in the tobacco industry and many consumers are turning to e-cigs or vaporizers over cigarettes. Cannabis oil is a very important input product that is in high demand and we are favorable on MediPharm’s leverage to this.
In the Middle of a Major Growth Cycle
MediPharm has signed wholesale purchase agreements with seven LPs and has secured multi-year processing agreements with two LPs while negotiating with several others. The number of companies that have signed a supply agreement with MediPharm has significantly increased and we are favorable on the growth prospects from here. Going forward, we expect to see these agreements start ramping up and we are monitoring how the team continues to execute.
The company has entered into a cannabis concentrate program agreements with these companies, whereby MediPharm will received dried cannabis for the purposes of creating cannabis oil. The company is in the middle of a major growth cycle and we have highlighted the signed supply agreements below:
Newstrike Brands’ (HIP.V) (NWKRF) subsidiary, Up Cannabis will supply MediPharm up to 1,200 kg of excess cannabis product that will be used for the purposes of extraction and the creation of cannabis oil and/or distillate.
INDIVA Limited (NDVA.V) will provide MediPharm with dried cannabis to use for the purposes of creating cannabis oil for an initial term of three years.
James E. Wagner Cultivation (JWCA.V) (JWCAF)
Bonify The company is currently in negotiations with several other Licensed Producers and we consider this to be a major growth driver for the company. MediPharm offers a high-quality service and we expect to see significant demand for its services going forward.
Focused on the Global Opportunity
During the last year, the legal cannabis industry has become a global opportunity as new markets have opened all over the world. From Australia to Colombia, Germany to South Africa, new cannabis market are emerging and we think this creates an incredible growth opportunity for companies like MediPharm.
On the international side of the business, MediPharm has been focused on this burgeoning opportunity and has been capitalizing on it as well. We are bullish on this side of the business and consider it to be a major growth driver in future years. MediPharm has already planted its flag in Australia and is focused on this rapidly growing opportunity. Through its subsidiary, MediPharm Labs Australia Pty. Ltd., MediPharm has completed its application process with the federal Office of Drug Control to extract and import medical cannabis products in Australia.
In late June, MediPharm commenced construction on a state-of-the-art extraction facility in Australia. The facility will have an initial footprint of approximately 1,000 square meters and will produce the same quality of cannabis oil as its counterpart in Canada. MediPharm Labs Australia will produce cannabis oil with a focus on downstream secondary extraction methodology, distillation, cannabinoid isolation, purification and R&D.
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