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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.
Dixie’s sustainable competitive advantages include:
Brand awareness:
Most recognizable brand in the cannabis industry.
Intellectual property:
Eight years of formulations, standard operating procedures, and emulsification technology.
Multi-state regulatory experience: packaging, labeling, regulatory compliance expertise.
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.
SLANG Cross-Border Cannabis Conglomeration Moves Closer to Trading Publicly
July 23, 2018 at 11:20 am
Published by NCV Newswire
SLANG Worldwide Announces $50 Million Subscription Receipt Financing in Connection with Proposed Strategic Transactions and Going Public Event
TORONTO, July 20, 2018 /CNW/ – Fire Cannabis Inc. (doing business as SLANG Worldwide) (the “Company” or “SLANG”) is pleased to announce that the Company has engaged Canaccord Genuity Corp. (“Canaccord Genuity”) and Clarus Securities Inc. as co-lead agents and co-bookrunners on behalf of a syndicate of agents, including GMP Securities L.P. and Paradigm Capital Inc. (collectively, the “Agents”) in connection with a best efforts private placement offering of subscription receipts (the “Subscription Receipts”) at a price of $1.50 per Subscription Receipt (the “Issue Price”) for aggregate gross proceeds of up to $50,000,000 (the “Offering”). PowerOne Capital Markets Ltd. and XIB Financial are acting as special advisors to the Company in connection with the Offering.
The net proceeds from the Offering will be applied to fuel the Company’s growth as it pursues investment and M&A opportunities for strategic cannabis consumer packaged goods and distribution-related assets. A portion of the net proceeds will also be used to satisfy the cash consideration payable in connection with the Organa Brands Transaction and Firefly Transaction (each as defined herein).
Further details relating to the Subscription Receipts and the Offering are set out below.
CORPORATE UPDATE
SLANG is proposing to complete a series of transactions with the aim of cementing its position as an operator of some of the world’s best cannabis brands and distribution assets. The proposed addition of these assets to SLANG’s industry-leading platform will significantly advance the Company’s strategy of pairing a leading brand portfolio with the world’s most extensive distribution network.
Already strategically aligned with three of the largest and most recognized cannabis companies in the world (Organa Brands, Canopy Growth Corporation, and Green House Brands), SLANG has gone a step further to deepen these relationships and has entered into a letter of intent with respect to the proposed acquisition of National Concessions Group, Inc. d/b/a Organa Brands (“Organa Brands” ) (the “Organa Brands Transaction”) which will bring the Organa Brands brand portfolio, distribution organization and management under the SLANG umbrella.
“We’re proud to be building a company with real, seasoned operators like the team at Organa Brands. Organa Brands was one of the early pioneers in the space, and their ability to successfully launch brands across multiple markets in the United States is unmatched,” said SLANG Co-founder and Director, Billy Levy.
SLANG is also seeking to increase its international footprint, having executed a letter of intent to enter into a strategic partnership that will encompass a licensing and distribution arrangement with Canadian licensed producer Agripharm Corp. (“Agripharm”) (a joint venture between Canopy Growth Corporation, Organa Brands, and Green House Seed Co.) (the “Agripharm Transaction”). Upon completion of the Agripharm Transaction, it is intended that Agripharm will produce products for SLANG’s portfolio of brands and may distribute them into Canada and international markets, including Europe, South America, Africa, and Australia where such distribution is legal.
The combined existing distribution capabilities of Organa Brands and Agripharm will provide the foundation for a nimble platform that will allow SLANG to quickly deploy brands, and understand consumer preferences, across multiple major markets around the world.
In a rapidly evolving market rife with product and category innovation, the net proceeds of the Offering will significantly amplify SLANG’s product portfolio, providing shareholders exposure to major product verticals. In addition to the brands proposed to be acquired through the Organa Brands Transaction. SLANG has entered into a letter of intent to acquire NWT Holdings, LLC d/b/a Firefly (“Firefly”) (the “Firefly Transaction”), a leading premium vaporizer company, and has been granted an exclusive right of first refusal to license the historic Green House Brands portfolio of IP for use in the United States.
As entrepreneurs, innovators, and cultural observers, we’ve seen an incredible evolution take place within the legal cannabis industry. We believe that we are uniquely positioned for success at a key inflection point for the evolving regulatory environment, capital markets and culture that drives the cannabis industry.
Peter Miller, SLANG Co-founder and President
Brands, distribution, and management proficiency will determine success; in these areas, we believe that SLANG is unmatched.
SUMMARY OF TRANSACTIONS
Organa Brands Transaction: SLANG, Organa Brands and each of the shareholders of Organa Brands have entered into a letter of intent in connection with the proposed acquisition of Organa Brands for cash and share consideration. The Organa Brands Transaction pairs some of the industry’s leading brands with widespread distribution and will help create one of the largest cannabis companies in the world. Organa Brands is a leading US Cannabis company, with distribution in 10 states. Selling one of its products every four seconds, its brands can be found in over 1,500 stores in the U.S. and Jamaica.
Firefly Transaction: SLANG has signed a letter of intent to acquire 100% of Firefly, a leading vaporizer technology and hardware company for cash and share consideration. Using world-class technology and design to deliver the best portable vaporizer experiences for lovers of flower and concentrates, Firefly products, including the Firefly 2, can be found today in over 2,500 stores across 14 countries. Upon completion of the Firefly Transaction, SLANG will be poised to release the next generation of Firefly devices, and distribute them across SLANG’s expansive distribution platform.
Agripharm Transaction: SLANG and Agripharm have entered into a letter of intent with respect to a proposed strategic partnership pursuant to which Agripharm will manufacture and distribute brands within the SLANG portfolio, and distribute them throughout its distribution channels. Agripharm is a vertically integrated, fully-licensed Canadian licensed producer that is operated as a joint venture between Canopy Growth Corporation, Green House Brands North America and Organa Brands.
Green House Brands Licensing Arrangement: SLANG and Green House Brands have entered into a licensing arrangement, pursuant to which SLANG has an exclusive right of first refusal to introduce Green House Brands’ portfolio of IP to the U.S. market. Established in 1985, the Green House Brands portfolio includes five leading cannabis businesses: Strain Hunters, Green House Seed Co., Green House Feeding, Green House Coffee Shops, and King of Cannabis—as seen on VICE and National Geographic. The winner of over 40 High Times Cannabis Cups, Green House has long been regarded as the pioneer of world-class genetics and cannabis brands.
SUBSCRIPTION RECEIPT FINANCING
The Subscription Receipts will be issued pursuant to a subscription receipt agreement (the “Subscription Receipt Agreement”) to be entered into among SLANG, Canaccord Genuity and Clarus Securities Inc. and a subscription receipt agent (the “Subscription Receipt Agent”). Upon satisfaction of certain Escrow Release Conditions (as described below), each Subscription Receipt will be automatically converted without any further consideration or action by the holder thereof into one unit of the Company, comprised of one common share of the Company (a “SLANG Share”) and one-half of one common share purchase warrant (each whole common share purchase warrant, a “Warrant”). Each Warrant will be exercisable into one SLANG Share at an exercise price of C$2.25 for a period of 24 months commencing on the date that the SLANG Shares are listed on a recognized Canadian stock exchange (the “Exchange”), subject to acceleration in the event the closing price of the SLANG Shares is equal to or greater than C$3.50 per share for 10 consecutive trading days on the Exchange.
The gross proceeds of the Offering (less the expenses of the Agents and 50% of the cash commission payable to the Agents) will be delivered to and held by the Subscription Receipt Agent in an interest bearing account (the “Escrowed Funds”). The remaining 50% of the cash commission payable to the Agents (plus any pro rata portion of accrued interest earned thereon) will be released from escrow to the Agents out of the Escrowed Funds and the balance of the Escrowed Funds will be released from escrow to SLANG upon satisfaction of the following conditions (together, the “Escrow Release Conditions”) on or before 5:00 p.m. (Toronto time) on the date that is 120 days following the closing of the Offering (the “Escrow Release Deadline”):
(A) the Company obtaining a receipt for a final prospectus (the “Prospectus”) from the securities regulatory authorities in each of the Canadian jurisdictions in which the Subscription Receipts are sold;
(B) the completion or the satisfaction or waiver of all conditions precedent to the: (i) Organa Brands Transaction; and (ii) Firefly Transaction, in each case in accordance with the definitive agreement governing such transactions and, to the satisfaction of Canaccord Genuity;
(C) the receipt of all required shareholder and regulatory approvals in connection with the Prospectus and the conditional approval of the Exchange for the listing of the SLANG Shares; and
(D) the Company and Canaccord Genuity having delivered a joint notice and direction to the Subscription Receipt Agent, confirming that the conditions set forth in (A) to (C) above have been met or waived.
If: (i) the Escrow Release Conditions are not satisfied on or before the Escrow Release Deadline; or (ii) prior to the Escrow Release Deadline the Company advises Canaccord Genuity or announces to the public that it does not intend to satisfy the Escrow Release Conditions, the Escrowed Funds (plus accrued interest earned thereon) shall be returned to the holders of the Subscription Receipts on a pro rata basis and the Subscription Receipts will be cancelled without any further action on the part of the holders. To the extent that the Escrowed Funds (plus accrued interest) are not sufficient to refund the aggregate Issue Price paid by the holders of the Subscription Receipts, the Company shall be responsible and liable to contribute such amounts as are necessary to satisfy any shortfall.
The Offering is expected to close on or about the week of August 20, 2018. The Subscription Receipts will be subject to an indefinite hold period under Canadian securities laws.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities 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 unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
About SLANG Worldwide
SLANG is a Toronto-based company consolidating brands along the regulated supply chain in the global cannabis industry, building a world class portfolio of assets. The Company is focused on acquiring and developing market-proven, regional brands, as well as creating new brands to meet the needs of cannabis consumers worldwide. For more information, visit www.SLANGWorldwide.co.
About Organa Brands
Organa Brands revolutionized the cannabis industry with the introduction of supercritical CO2 extracted cannabis oil in 2010 and the introduction of the groundbreaking O.penVAPE device in 2012. Today, the company is home to some of the world’s largest consumer cannabis brands. After developing O.penVAPE, Bakked, and Organa Labs into world-class brands with nationwide distribution, the company acquired The Magic Buzz, and an interest in, and exclusive distribution rights for, District Edibles. Organa Brands sells one of its products every 4 seconds around the world, and has delivered over one billion puffs through its flagship O.penVAPE line. A pioneer in the cannabis space, Organa Brands products are available in 10 states and Jamaica. Organa Brands’ products are sold in over 1,500 retail locations with ancillary hardware sold in thousands of retailers globally – making it the largest cannabis-oil-based consumer products company in the United States. For more information, please visit www.OrganaBrands.com.
About Green House Brands
Green House Brands is bringing the most awarded and recognized cannabis brand in the world to the North American market. Established in 1985 in Amsterdam, the Green House Brands portfolio includes five leading marijuana businesses — Strain Hunters, Green House Seed Co., Green House Feeding, Green House Coffee shops & King of Cannabis — as seen on VICE & National Geographic. Green House assets have won the company numerous accolades, including over 40 High Times Cannabis Cups and 200+ awards for top genetics, establishing the company’s leadership in the global cannabis industry. Green House was a pioneer in the development of the European cannabis coffee shop market, where its Green House Coffee shops in the Netherlands and Strain Hunters Clubs in Spain remain market leaders. As Strain Hunters, the company has been featured in documentary series on HBO and VICE, highlighting its globetrotting journeys to find the rarest landrace strains of cannabis. Green House and Strain Hunters media has over 150M views and has one of the most powerful marketing platforms in the industry. Green House enters the rapidly developing legal North American cannabis markets with all of its enterprises. For more information please visit www.greenhousebrands.com.
About Agripharm
Agripharm Corp. is an ACMPR-licensed, 20,000 sq. ft. indoor growing facility based in Creemore, Ontario. The company is operated through a joint venture between Canopy Growth Corporation, Green House Holdings North America Inc. (Strainhunters, Green House Seed Co., King of Cannabis, and GH Medical), and Organa Brands (O.penVAPE, Magic Buzz, Bakked, and District Edibles).
About Firefly
Launched in 2013, Firefly develops premium portable vaporizers powered by world-class technology. The brands Firefly 2 vaporizer is widely considered to be one of the leading premium dry herb vaporizers on the market and can be found today in over 2,500 stores across 14 countries. Firefly’s dynamic convection technology delivers rich, flavorful vapor in seconds and celebrates your flowers and concentrates at their freshest. For more information, visit www.thefirefly.com.
10-State Cannabis Operator PalliaTech Plans Public Listing in Canada
July 26, 2018 at 6:22 pm
Published by NCV Newswire
Proposed Acquisition of Control of Lead Ventures by Shareholders of PalliaTech
Vancouver, B.C. – July 26, 2018 – Lead Ventures Inc. (CSE: LEAD) (“Lead Ventures” or the “Company”) is pleased to announce, further to the press release dated June 29, 2018, that it has entered into a transaction agreement (the “Agreement”) with PalliaTech, Inc., a private Delaware corporation and leading vertically integrated medical and wellness cannabis operator in the United States (“PalliaTech”).
The Agreement outlines the proposed terms and conditions pursuant to which Lead Ventures and PalliaTech will effectuate a business combination (the “Proposed Transaction”) that will result in the acquisition of control of Lead Ventures by the shareholders of PalliaTech and the listing for trading of the shares of the resulting issuer (the “Resulting Issuer”) on the Canadian Securities Exchange (the “CSE”). Pursuant to the Proposed Transaction which was negotiated at arm’s length, the Resulting Issuer will become the indirect parent and sole voting stockholder of PalliaTech.
Terms of the Transaction
In connection with the Proposed Transaction, the Company will, among other things: (i) change its name as chosen by PalliaTech and acceptable to applicable regulatory authorities; (ii) reclassify and consolidate its outstanding common shares on a basis to be determined; and (iii) replace all directors and officers of the Company on closing of the Proposed Transaction with nominees of PalliaTech.
The Proposed Transaction is subject to a number of conditions including, without limitation, receipt of all necessary shareholder and regulatory approvals, receipt of the conditional approval for the listing of the shares of the Resulting Issuer on the CSE following completion of the Proposed Transaction as well as customary termination rights.
PalliaTech currently intends to complete a brokered private placement of subscription receipts (the “PalliaTech Subscription Receipts”) to accredited investors (the “PalliaTech Financing”) through a single purpose vehicle. Under the Proposed Transaction, existing shareholders of the Company immediately prior to the completion of the Proposed Transaction will receive post-consolidated shares of the Resulting Issuer having an aggregate value of CAD$2.16 million, at a price per share equal to the PalliaTech Financing price.
Further details of the Proposed Transaction will be included in subsequent disclosure documents (which will include business and financial information in respect of PalliaTech) to be filed by the Company in connection with the Proposed Transaction. It is anticipated that an annual general and special shareholder meeting of the Company to approve, among other matters, all required matters in connection with the Proposed Transaction, will take place in the third quarter of 2018 and the closing of the Proposed Transaction will take place before the end of the year.
The common shares of the Company will remain halted until all the applicable regulatory authorities have accepted all necessary filings.
About PalliaTech, Inc.
PalliaTech is a leading vertically integrated medical and wellness cannabis operator in the United States. Headquartered in Wakefield, Massachusetts, PalliaTech is located in 10 states and operates 23 dispensaries, 10 cultivation sites and 9 processing sites with a focus on highly populated, limited license states, including New York, New Jersey, Florida and Massachusetts. PalliaTech leverages its extensive research and development capabilities to distribute cannabis products with the highest standard for safety, effectiveness, consistent quality and customer care. PalliaTech is committed to being the industry’s leading resource in education and advancement through research and advocacy.
Through its team of physicians, pharmacists, medical experts and industry visionaries, PalliaTech has created Curaleaf, a premier branded cannabis-based therapeutic offering, delivering premium quality medical cannabis in multiple product formats to patients through its network of branded retail dispensaries. Curaleaf’s Florida operations are the first in the cannabis industry to receive the Safe Quality Food certification under the Global Food Safety Initiative, setting a new standard of excellence. For more information please visit www.palliatech.com and www.curaleaf.com.
How This Leading Marijuana Company Is Capitalizing On The Rise Of Smoke-Free Weed Consumption
Javier Hasse, Benzinga Staff Writer
October 12, 2017
As the cannabis industry continues to develop so do consumption methods. Benzinga recently shared a look into the rise of marijuana concentrates, one of the most popular product categories, with sales only trailing buds ("flowers") and pretty much on par with pre-rolled joints and vapor pens or vaporizers.
What was particularly interesting about the information cannabis industry analytics firm Headset shared was the rise in demand for smoke-free pot products, which accounted for almost 50 percent of all sales — according to a recent study they conducted. Confirming this trend, BDS Analytics published its own paper saying that roughly 20 percent of cannabis dispensary sales in California during the second quarter of 2017 came from concentrates — with 61 percent of those stemming from vape pens. Finally, weed delivery service Eaze reported a 400 percent surge in vaporizer sales in 2016, to 24 percent.
Against this backdrop, Cura Cannabis Solutions, one of the largest cannabis brands in America, focused solely on cannabis oils, seems poised for success. Interested in how the company is capitalizing on the smoke-free weed consumption trend, Benzinga spoke with the company’s CEO Nitin Khanna, and asked him a few questions about a business that, unlike most other large ones in the cannabis industry today that are trying to be vertically integrated, seeks to remain horizontal and hyper-focused on the oils segment.
Doubling In Size
This narrow approach to the market has helped Cura Cannabis Solutions grow at a vertiginous pace. Between April and December of 2016, the company doubled its size every month, pushing revenues from $50,000 in April, to more than $1 million in December, to roughly $4 million in September of 2017. It's now the largest cannabis company (in terms of revenue and employees) in Oregon, with a 20 percent market share.
At this speed, sales are expected to reach $40 million in 2017 and $120 million in 2018. Revenue does not only derive from wholesale and retail of vape cartridges, Khanna explained, but also from oil sales to edibles and drinks companies.
In April, the company expanded into California and is already generating more than $1.2 million in revenue per month. Its flagship product line, Select Oils, entered the Nevada market this month, and sales are expected in a similar range than in California. Cura anticipates moving into Arizona, Florida and Canada next.
A Shift In Preferences
Even though the concentrates category is gaining traction at a rapid pace, not all products are created equal.
“In January, our sales were 80 percent CO2-extracted oil and 20 percent distillate or clear oils [made via ethanol extraction]. Now, we’re seeing a dramatic shift in consumer preferences toward clear oils, which accounted for 80 percent of our September sales,” Khanna told Benzinga.
Looking to satisfy every consumer in the spectrum, from recreational users to medical patients who need high amounts of THC without smoking weed or consuming it with sugar — which most edibles have — Cura has come up with a line of oils that range from zero percent THC-high CBD to 99.9 percent THC-A.
“As flower consumption declines over time and people move to safer alternatives, we expect vape cartridges to continue to gain traction,” Khanna said.
Hamilton’s Support
As well as founding and running his own startups, driving revenues of more than $300 million each year. In addition to a tech background, Khanna brings experience working with elected officials, regulators and lobbyists, which proved very useful when trying to enter new states with Cura Cannabis Solutions.
The company recently completed a $12.8 million raise on a $200 million valuation, which represents one of the largest valuations given to a privately held cannabis company in the U.S. The raise consisted of $6.0 million in debt and $6.8 million in equity. While the equity tranche was subscribed by several investors, the debt tranche came from Hamilton Investment Partners.
Douglas AP Hamilton, co-founder and managing partner of the aforementioned investment firm also weighed in on the issue.
“I have been focusing a large amount of my time over the last three years looking at and analyzing companies in the cannabis space," he told Benzinga. "I have made several investments in vertically integrated companies, but in the aggregate, I have passed on 90 percent of the opportunities presented to me. The reasons fall into several categories from weak financials, poor execution, and strategies that did not have long-term potential. However, the main reason, far and away, was weak management teams."
Cura is unique, he added.
“Not only does it have, in my opinion, the best management team in the business, but its strategy, dominate market position, and unique IP and product quality, all of which contribute to the lowest cost of production I have observed. This has resulted in a competitive advantage unique in my more than 35 years of private equity investing. I am well aware of the crazy valuations being placed on companies in the space. Cura will most likely be the first real billion dollar company.”
09/22/18 8:35 PM
