GTEC Announces Multiple Retail Store Initiative in Vancouver BC
KELOWNA, BC, Nov. 7, 2018 /CNW/ - GTEC Holdings Ltd. (TSXV: GTEC) (OTC: GGTTF) ("GTEC" or the "Company") is pleased to announce that it has entered into a binding letter agreement (the "First Agreement") with a private British Columbia corporation ("AssetCo") to purchase the business assets of AssetCo (the "Acquisition"), which primarily consist of two cannabis dispensaries located in Vancouver, BC. AssetCo has ceased all operations and is currently in the process of converting the locations from municipally licensed medical cannabis retail stores, into Provincially licensed private non-medical cannabis retail stores.
GreenTec Holdings (CNW Group/GreenTec Holdings)
The Acquisition is subject to the following:
(i) the completion of due diligence by GTEC.
(ii) the successful assignment of municipal development permits for a cannabis retail store at each of the two locations.
(iii) the receipt of non-medical cannabis retail store licenses from the British Columbia Liquor and Cannabis Regulation Branch (the "LCRB").
Under the terms of the First Agreement, all the business assets of the AssetCo will be purchased by GreenTec Retail Ventures Inc., a wholly owned subsidiary of GTEC, for a total purchase price of CAD $5.5 million. The purchase price will be comprised of $1.5 million cash and $4 million by way of issuance of GTEC common shares at a 10-day volume weighted average price ("VWAP").
Additionally, GTEC has entered into a binding letter agreement (the "Second Agreement") with a society created pursuant to the laws of British Columbia ("SocietyCo") to purchase all the assets of SocietyCo, which consist primarily of one medical cannabis dispensary, and a medical cannabis consulting clinic, both of which are located in Vancouver, BC. SocietyCo has ceased all operations and is currently in the process of converting the location from a municipally licensed medical cannabis retail store into a Provincially licensed private non-medical cannabis retail store.
Pursuant to the Second Agreement, GTEC has agreed to issue such number of common shares (the "Milestone Shares") in the authorized capital of GTEC to the vendors of SocietyCo (calculated at a 10-day VWAP) in accordance with the following milestones:
$500,000 upon the entering into, or the assignment of, the lease for the cannabis dispensary;
$500,000 upon the transfer to GTEC of the municipal development permit for a cannabis retail store;
$500,000 upon the receipt of a license in the name of GTEC from the LCRB to operate a retail cannabis store; and
$500,000 upon the municipality granting the business licence suitable for a non-medical retail cannabis store in the name of GTEC.
The common shares issued pursuant to both binding letter agreements are subject to a four month and a day hold period from the date of issuance, in accordance with applicable Canadian securities laws.
"As GTEC evolves into a revenue generating company, the addition of these locations will complement our initiative to achieve market share, brand awareness and consumer loyalty within the premium segment of the market," said Norton Singhavon, Chairman & CEO of GTEC. "Upon successful Provincial licensing and completion of these acquisitions, this will place our retail footprint across all three Western Provinces- BC, Alberta and Saskatchewan, with an estimated 12 locations operational in 2018 and 30+ locations to be operational in Q1 of 2019."
Both acquisitions are subject to approval from the TSX Venture Exchange and are arm's length transactions which are expected to constitute Expedited Acquisitions pursuant to TSXV Policy 5.3 – Acquisitions and Disposition of Non-Cash Assets.
GTEC was founded in 2017 to capitalize on opportunities in the nascent and rapidly growing legal cannabis industry. GTEC is a public corporation listed on the TSX Venture Exchange and based in Kelowna, British Columbia. GTEC is focused on growing premium quality craft cannabis in purpose-built indoor facilities. GTEC currently holds a 100% interest in GreenTec Bio-Pharmaceuticals Corp., Grey Bruce Farms Incorporated, Zenalytic Laboratories Ltd., Alberta Craft Cannabis Inc. and Tumbleweed Farms Corp.
To view more about the company or to request our most recent corporate presentation, please visit our website at www.gtec.co.