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Cannabis Wheaton Announces Closing of Dosecann Acquisition
VANCOUVER, British Columbia, May 17, 2018 (GLOBE NEWSWIRE) -- Cannabis Wheaton Income Corp. (TSX-V:CBW) ("Cannabis Wheaton" or the "Company") is pleased to announce that it has closed its previously announced acquisition (the “Transaction”) of all of the outstanding securities of Dosecann Inc. (“Dosecann”), a late-stage “Licensed Dealer” applicant pursuant to the Narcotic Control Regulations (the “NCR”).
Located in the biotech hub of Charlottetown, Prince Edward Island, Dosecann is currently completing the buildout of a 42,000 square foot facility, purpose-built for the research, development, extraction, formulation, filling and packaging of cannabis-based products. Upon receipt of regulatory approval, Dosecann will leverage its state-of-the-art facility to begin developing a range of value added cannabis-based products for the Company and its streaming partners to ultimately be sold to medical cannabis patients and, upon approval, into the natural health product and adult-use cannabis markets.
Pursuant to the acquisition agreement dated April 3, 2018, the Company has acquired all of the outstanding securities of Dosecann (the “Dosecann Securities”) by way of a “three-cornered amalgamation” (the “Acquisition”) for an aggregate purchase price of up to $38,000,000, payable in common shares of the Company to the holders of the Dosecann Securities (the “Consideration Shares”), subject to the satisfaction of certain post-closing time and performance-based milestones. As part of the Acquisition, all outstanding convertible securities of Dosecann have either been converted into Dosecann common shares and exchanged for Consideration Shares or have otherwise been exchanged for convertible securities of Cannabis Wheaton based on the exchange ratio used in the Acquisition.
The Company has issued 24,494,496 Consideration Shares at a deemed price of $1.47, of which 9,630,947 are subject to performance based milestone release. In addition, the Company has assumed the obligations of the existing Dosecann common share purchase warrants, resulting in the issuance of 5,071,248 common share purchase warrants in the capital of the Company (the “Replacement Warrants”). Each whole Replacement Warrant entitles the holder to purchase one common share of the Company at an exercise price of $0.962 until January 2020. As a result of the closing of the Transaction, Dosecann is now a wholly-owned subsidiary of the Company.
Upon receipt of a Dealer’s Licence pursuant to the NCR, Dosecann will serve a critical role in the “mid-stream” segment of Cannabis Wheaton’s platform. Dosecann will be the Company’s primary facility for various value enhancing intellectual property related activities such as extraction, processing, branding and licensing, product development and manufacturing, research and development, and various international opportunities. The Company also intends to utilize the Dosecann facility for the commercialization of various cannabis products available under the Company’s recently announced license agreement with Dixie Brands, Inc., as permitted by applicable law.
Hugo Alves, President and Director of Cannabis Wheaton stated, “The addition of Dosecann to the Cannabis Wheaton platform provides us with a strategic regulatory tool that we believe will be increasingly important under the proposed Cannabis Act. We couldn’t be more excited to be working with the high caliber team Greg Boone has put together to develop Dosecann into a true ‘center of excellence’ in the creation of intellectual property, product development and commercialization. We believe the Dosecann team’s proven ability to take pharmaceutical, natural health products, and consumer packaged goods from conceptualization to commercialization will be of huge value to the Company’s wholly owned subsidiaries and streaming partners as we enter the next leg of growth in the domestic and international markets for cannabis products.”
Greg Boone, Founder and CEO of Dosecann commented, “The Dosecann team is delighted to partner with Cannabis Wheaton as we near the completion and licensing of our purpose-built facility. Given their in-depth industry knowledge and exceptionally strong management team, we believe Cannabis Wheaton is the perfect partner to bring Dosecann’s unique product formulations to market. We look forward to collaborating with Hugo and his team going forward.”
Dr. Christina Woollard, Dosecann’s Chief Science Officer states, “I joined Dosecann because I was confident that Dosecann would play a significant role in the Canadian cannabis industry. I have dedicated my career to the study and commercialization of patient focused medicines and I look forward to leveraging my 18 years of experience as the Head of Pharmaceutical Development for GW Pharmaceuticals to help Dosecann become the benchmark cannabis manufacturing and development facility in Canada.”
ON BEHALF OF THE BOARD
"Chuck Rifici" Chairman & CEO
About Cannabis Wheaton (TSX-V:CBW)
Cannabis Wheaton is a collective of entrepreneurs with a passion for the cannabis industry past, present and future. Our mandate is to facilitate growth for our partners by providing them with financial support and sharing our collective industry experience. Our partners all have different visions, voices and brand values, and all share a common goal—to build a world-class industry based on ethics, diversity, quality and innovation.
Dosecann Inc. is a PEI-based Licensed Dealer applicant currently completing the buildout of a 42,000-square foot GMP compliant facility. Within the purpose-built facility, Dosecann intends to accommodate product development, extraction, formulation, filling and packaging. Dosecann is developing a suite of cannabis products across a variety of delivery methods for both domestic and international medical and adult use markets.
For more information about investing in Cannabis Wheaton, please visit: http://www.wheatonincome.com or contact our Investor Relations Team:
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Notice Regarding Forward Looking Information:
This news release contains certain "forward-looking information" within the meaning of applicable Canadian securities law. Forward-looking information is frequently characterized by words such as "plan", "continue", "expect", "project", "intend", "believe", "anticipate", "estimate", "may", "will", "potential", "proposed" and other similar words, or information that certain events or conditions "may" or "will" occur. This information is only a prediction. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking information throughout this news release. Forward-looking information includes, but is not limited to: the proposed licensing of Dosecann's facility and the expected timing to obtain all necessary licenses required for the proposed operation of the facility; expected growth into domestic and international markets as a result of the Acquisition; Dosecann's critical role in the "mid-stream" segment of Cannabis Wheaton’s platform; and the intended use of the Dosecann facility. By identifying such information and statements in this manner, the Company is alerting the reader that such information and statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company or, following completion of the Acquisition, Dosecann, to be materially different from those expressed or implied by such information and statements.
A number of factors could cause actual results to differ materially from a conclusion, forecast or projection contained in the forward-looking information in this release including, but not limited to, whether: Dosecann is able to obtain and maintain a Dealer’s Licence; the Company is able to successfully manage the integration of Dosecann's operations with its own; the Dosecann facility can be completed in the manner currently proposed or at all; Dosecann can obtain all necessary governmental and regulatory permits and approvals for the facility, and whether such permits and approvals can be obtained in a timely manner; the counterparties to the acquisition agreement and related transaction agreements comply with their respective obligations under the acquisition agreement and related transaction agreements; and general economic, financial market, legislative, regulatory, competitive and political conditions in which the Company and Dosecann operate will remain the same. Additional risk factors are disclosed in the revised annual information form of the Company for the financial year ended December 31, 2016 dated May 23, 2017.
New factors emerge from time to time, and it is not possible for management to predict all of those factors or to assess in advance the impact of each such factor on the Company's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking information. The forward-looking information in this release is based on information currently available and what management believes are reasonable assumptions. Forward-looking information speaks only to such assumptions as of the date of this release. In addition, this release may contain forward-looking information attributed to third party industry sources, the accuracy of which has not been verified by the Company. The purpose of forward-looking information is to provide the reader with a description of management's expectations, and such forward-looking information may not be appropriate for any other purpose. Readers should not place undue reliance on forward-looking information contained in this release.
The forward-looking information contained in this release is expressly qualified by the foregoing cautionary statements and is made as of the date of this release. Except as may be required by applicable securities laws, the Company does not undertake any obligation to publicly update or revise any forward-looking information to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.