Tilray To Acquire Natura Naturals Holdings For Up To C$70 Million Subject To Performance Milestones

CANADA: Tilray, a global leader in cannabis research, cultivation, production and distribution, announced it has entered into a definitive agreement to acquire all of the issued and outstanding securities of Natura Naturals Holdings, the parent company of a licensed cultivator of cannabis.

Tilray_LogoAs a result of the acquisition, if completed, Tilray will obtain Natura’s 662,000 square-foot greenhouse cultivation facility, of which 155,000 square-feet are currently licensed, and all subsequent cannabis output from this facility. Natura, through a wholly-owned subsidiary located in Leamington, Ontario, is a licensed cultivator under the Cannabis Act specializing in the greenhouse cultivation of cannabis.

Under the terms of the definitive agreement and subject to certain customary adjustments, Tilray will deliver C$35 million at closing, comprised of C$15 million in cash and C$20 million in Tilray Class 2 common stock. Natura shareholders will receive their pro rata portion of the C$15 million closing cash amount, after the deduction of certain transaction expenses incurred by Natura and subject to applicable withholding taxes. Upon Natura reaching certain quarterly production milestones over the following twelve-month period, up to C$35 million of Tilray common stock may become payable resulting in a total purchase price of C$70 million if fully achieved.

“We’re very pleased to have an agreement in place that allows us to expand our capacity to supply high-quality branded cannabis products to the Canadian market,” said Brendan Kennedy, Tilray President and CEO. “Through an extensive and thorough search for the right supply partner, we’re pleased to have come to a mutually-beneficial agreement with Natura.”

Tilray currently operates three state-of-the-art facilities in Canada and one in Portugal: Tilray Canada Ltd. (“Tilray Canada”), a Nanaimo, British Columbia-based research, cultivation and processing facility which primarily serves the Canadian and global medical cannabis market; Tilray Portugal, Unipessoal, Lda. (“Tilray Portugal”), located in Cantanhede, a research, processing, cultivation, packaging and distribution facility which will primarily serve the medical cannabis market in Europe; High Park Farms Ltd. (“High Park Farms”), an Enniskillen, Ontario-based cultivation and processing facility primarily serving the adult-use market in Canada; and the newly-licensed High Park processing facility in London, Ontario, which will exclusively serve the adult-use market in Canada. Tilray and High Park also have cannabis supply agreements in place with Licensed Producers throughout Canada and most recently signed an exclusive sale, supply, distribution and marketing agreement to deliver High Park adult-use cannabis products in Québec with ROSE LifeScience. The proximity of Natura’s facility to Tilray and High Park’s existing Ontario operations is expected to be valuable in the long-term collaboration of cannabis research, cultivation and processing within the Company.

Prior to signing the definitive agreement, Tilray conducted extensive due diligence on Natura’s cultivation facility and cannabis products. Prior to distribution, all cannabis products produced at the Natura facility will adhere to Tilray’s stringent quality assurance standards. The increased supply from Natura will allow Tilray to expand its capacity to supply the Canadian market with high-quality branded cannabis products.

The transaction will be completed by plan of arrangement under the Ontario Business Corporations Act. Completion of the transaction will be subject to customary terms and conditions, including shareholder and court approval of the arrangement. It is anticipated that the closing of the transaction will be completed within the next 30 days. Tilray looks forward to sharing more information related to the company’s increasing production capacity and global growth strategy, in the coming months.

Cowen provided a fairness opinion to Tilray’s board of directors in connection with the transaction.

Isodiol Agrees To Acquire 51% Of Round Mountain Technologies, Commences Certified Organic Hemp Farming in Nevada

CANADA: Isodiol International, a global CBD innovator specializing in hemp based health and wellness products, the development of pharmaceutical CBD delivery methods and the manufacturing of a pure, natural CBD as an Active Pharmaceutical Ingredient for use in finished pharmaceutical products, is pleased to announce that it has entered into a binding agreement to acquire 51% of Round Mountain Technologies, a cultivator of organic hemp with operations in Nevada.

RMT holds a license from the State of Nevada to cultivate organic hemp in Nye County.  The property consists of approximately 155 acres, of which RMT and Isodiol intend to plant 70 acres within the coming weeks, initially.  RMT and Isodiol will contribute to Nevada’s local economy by ensuring that all hemp harvested by RMT will be processed within the State of Nevada.

Logo-Isodiol-1500wUnder the terms of the agreement, Isodiol will commit funding of US$400,000 in cash to RMT for working capital and general obligations and issue US$250,000 in Isodiol stock based on the May 22, 2018 closing price, subject to 36-month lock-up/leak-out guidelines, in exchange for the 51% RMT ownership interest.

“This transaction is another significant milestone in Isodiol’s storied path to success,” said Marcos Agramont, CEO of Isodiol.  Mr. Agramont continued, stating, “We are pleased to be working with RMT and increasing our US organic hemp biomass supply for CBD production.”

Isodiol has successfully pursued its strategy of establishing a globally dominant position in the cultivation of jurisdictionally compliant industrial hemp and manufacturing of jurisdictionally compliant CBD consumer products.  To date, Isodiol has the ability to legally source, cultivate, and/or manufacture industrial hemp on three continents, North America, Europe, and Asia.  Additionally, Isodiol’s UK Subsidiary, BSPG Laboratories Ltd. produces CBD that has been approved as an Active Pharmaceutical Ingredient (API) by the United Kingdom Medicines and Healthcare Products Regulatory Agency (MHRA) for use in Finished Pharmaceutical Products (FPPs).

“We believe we produce the purest, natural CBD in the industry.  The API is recognition of that achievement.  Isodiol will continue to pursue global recognition and approval of the API grade CBD and expand our distribution of CBD consumer products in new jurisdictions while continuing to expand our manufacturing capabilities throughout the world,” said Agramont.

“Isodiol has come to embrace the positive legal developments in legislation, regulations, and agency interpretations in jurisdictions throughout the world that have paved a legal pathway for Isodiol to legally and commercially produce pure, natural CBD from industrial hemp,” said Agramont.  Agramont went further to say, “Isodiol’s previous efforts to seek alternative sources of CBD, such as through novel hop strains, are still of interest to Isodiol, but due to favorable legislative and regulatory outcomes, Isodiol is focusing on cannabinoids produced from hemp. Presently, sources for Cannabinoids other than hemp would take longer and cost substantially more to develop.”

MedMen Announces Acquisition Of Florida Marijuana License And Cultivation Facility

CALIFORNIA: MedMen, the country’s leading cultivator, producer and retailer of state-sanctioned cannabis, has signed a definitive agreement to acquire dispensary and cultivation assets from Florida-based Treadwell Nursery.

As part of the transaction, MedMen will acquire Treadwell Nursery’s cultivation facility situated on 5 acres in Eustis, Florida and the right to open 25 medical marijuana dispensaries in the State of Florida.

Screenshot 2018-06-07 09.02.52“For nearly a decade we have been positioning ourselves to capitalize on enormous market opportunities like this,” said MedMen Co-founder and CEO Adam Bierman. “This acquisition is right in line with our strategy of establishing a presence early on in high potential markets with limited licenses and large populations. Florida is the third most populous state in the country with a medical marijuana market estimated to reach $1 billion in annual sales by 2020. MedMen has built the best-in-class brand, and we continue to invest in premium assets that solidify our dominant position in the most important cannabis markets in the world.”

MedMen employs more than 800 people and currently operates 18 licensed cannabis facilities in cultivation, manufacturing and retail in California, Nevada and New York. The addition of Florida expands the Company’s reach to yet another key market in the fastest growing industry in the country.

As consideration for the acquisition, the Company will pay US$53 million, subject to a working capital adjustment, half of which will be satisfied in cash and the other half of which will be satisfied by way of issuance of common units of MM Enterprises, a subsidiary of the Company, which by their terms are redeemable for Class B Subordinate Voting Shares of the Company. In respect of the cash consideration, the LLC will pay Treadwell Nursery US$6,625,000 on the closing date and on each of the dates that are three (3), six (6) and nine (9) months after the closing date. In respect of the Redeemable Units, the number of units will be based on the lesser of the closing trading price of the Subordinate Voting Shares on the Canadian Securities Exchange as of June 4, 2018 or the two-week weighted average daily closing price prior to the closing of the transaction.

The transaction is expected to close within 90 days and is subject to customary closing conditions, including receipt of state regulatory approvals. If certain regulatory approvals are not obtained, the Company and Treadwell Nursery will have the right to terminate the Agreement.

INDIVA and Bhang Corporation Create Canadian and International Joint Venture

CANADA: INDIVA Limited has announced a 50/50 joint venture with, and a USD $1 million investment into, Bhang Corporation, an award-winning licensor of cannabis and CBD edibles and concentrates. The joint venture, which is managed by INDIVA, has exclusive rights to manufacture and sell Bhang products in Canada and the right to export those products internationally.

Bhang is an intellectual property company which licenses rights to a full range of cannabis and CBD products, including chocolates, gums and oral sprays, isolates, vapes and vape cartridges and accessories. Through the JV, INDIVA becomes the exclusive licensed manufacturer and distributor of a full array of award winning products in Canada and the exclusive licensed exporter of such products internationally.

The JV will be operated through an Ontario corporation owned 50/50 by INDIVA and Bhang.  INDIVA is the manager of the JV and has committed to investing USD $5 million in building cannabis processing infrastructure and, in addition to being able to use such infrastructure to produce INDIVA branded products, making that infrastructure available to the JV. Bhang is contributing its know-how and intellectual property, including its trademarks and patents, to the JV and will collaborate with INDIVA on sales and marketing. Each of the parties has committed to contribute equally to the working capital of the JV.

It is expected that the cannabis and CBD products produced by the joint venture will be sold in Canada primarily in the adult-use cannabis market (sometimes referred to as “the recreational market”), which is expected to launch in the summer or fall of 2018. Subject to compliance with applicable laws and regulations, it is expected that Bhang branding will be most prominent on the packaging but all packages will also visibly display INDIVA branding i.e. “Powered by INDIVA”.

“The joint venture allows us to leap frog over the years and millions of dollars of research and development that other Canadian licensed producers will need to spend to successfully produce high quality cannabis and CBD products,” explained Koby Smutylo, Chief Operating Officer and General Counsel, INDIVA. “We will also benefit from the large consumer following Bhang products enjoy in Canada and worldwide,” he continued.

“Our stated strategy is to build a strong and experienced team” commented Niel Marotta, Chief Executive Officer, INDIVA. “This joint venture and other strategic relationships we are building in Canada, and internationally are the further manifestation of this strategy.”