Transaction Unites Canada's Two Strongest
Cannabis Brands, and Establishes World's Largest Publicly-Traded
Cannabis Producer
TORONTO and SMITHS
FALLS, ON, June 24, 2015 /CNW
Telbec/ - Tweed Marijuana Inc. ("TMI" or "Tweed") (TSXV: TWD),
operator of licensed cannabis producers Tweed Inc. and Tweed Farms
Inc., and Bedrocan Cannabis Corp. ("Bedrocan Canada") (TSXV: BED)
are pleased to announce that they have entered into a definitive
arrangement agreement, pursuant to which TMI will acquire all of
the issued and outstanding securities of Bedrocan Canada. TMI will
be renamed at its annual meeting of shareholders to reflect its
evolution as a multi-brand holding company. This acquisition marks
the beginning of the structured evolution of the Canadian cannabis
sector, and it is intended that TMI's portfolio of technologies,
brands and geographies will continue to expand.
Tweed and Bedrocan Canada represent distinct market segments
that appeal to different consumer needs. To meet market expansion
demands, TMI will function as a holding company that is uniquely
able to respond to these distinct voices, and will increase its
ability to grow market share and diversify client acquisition.
Specifically, the Bedrocan Canada brand will be sustained and
further supported in establishing its leadership with the clinical
and research communities. The Bedrocan Canada division, with its
unique focus, will continue to operate separately, though in
alignment with the other TMI operating divisions.
Tweed represents industry-leading consumer brand power and
production capacity. TMI was the first publicly traded, federally
regulated cannabis company in North
America and has consistently maintained the largest market
capitalization in the industry. Bedrocan Canada represents
clinical, scientific and research strength, especially as it
pertains to strain genetics and stability, advanced automation in
cannabis production, and standardization of active pharmaceutical
ingredients. With its Dutch licensor, Bedrocan Canada is the most
experienced medical cannabis producer in the world. Uniting Tweed,
Tweed Farms, and Bedrocan Canada under TMI creates the organization
best positioned to meet diverse consumer needs, engage in clinical
research, and build trust with health practitioners and medical
regulators.
"We are bringing the two strongest brands in Canadian cannabis
under one roof," said Bruce Linton,
Chairman and CEO of Tweed. "We will continue to develop and grow
the Tweed and Bedrocan Canada brands, focusing on rapidly
increasing market penetration for our full line of products. Over
5,000 existing customers will now benefit from having access to
products from two producers. For future patients and physicians,
the choice will be clear."
"The rationale for and benefits of this transaction are clear,
for investors, health professionals, researchers, and most
importantly, for patients," said Marc
Wayne, President and CEO of Bedrocan Canada. "Tweed and
Bedrocan Canada have each helped set the industry standards for
professionalism, product quality, dependable supply and exceptional
customer care. Together, we will have the largest production and
sales capacity in the industry, as well as a broad and
complementary product line, and will be capable of allocating
additional resources to product research and innovation, as well as
to continuous improvement of the customer care experience."
The current consolidated licensed sales capacity of
approximately 6,000 kg/yr will ensure that today's customers have
access to a consistent supply of cannabis across a variety of
product lines, with the potential to reach an even greater number
of patients, pending further Health Canada approvals at TMI's three
existing facilities. The company will continue to leverage its two
state-of-the-art indoor facilities, as well as its greenhouse
platform.
Under the terms of the acquisition, Bedrocan Canada shareholders
will be entitled to receive 0.4650 common shares of TMI for each
common share of Bedrocan Canada held. It is expected that TMI will
issue a total of approximately 33.9 million common shares in
connection with the acquisition having an aggregate value of
approximately $61.0 million based on
the $1.80 per share closing price of
the TMI shares on the TSX Venture Exchange on June 23, 2015.
In connection with the acquisition, TMI will appoint two
individuals designated by Bedrocan Canada to the board of directors
of TMI. The acquisition is intended to be implemented by way of
plan of arrangement and is currently expected to close by the end
of August 2015. Closing remains
subject to Bedrocan Canada shareholder approval, court approval,
the approval of the TSX Venture Exchange, and an amendment to the
terms of Bedrocan Canada's license agreement with Bedrocan Beheer
BV, among other conditions precedent. Upon closing of the
acquisition, Bedrocan Canada will become a subsidiary of
TMI.
Additional details of the proposed transaction will be provided
to Bedrocan shareholders in information circular to be delivered to
them in connection with an upcoming special meeting of shareholders
to be held to consider the proposed transaction. The Board of
Directors of Bedrocan Canada intends to recommend unanimously that
Bedrocan Canada shareholders vote in favour of the acquisition.
The recommendation of the Board of Directors of Bedrocan Canada
is supported by a fairness opinion provided to its Special
Committee by the Committee's financial advisor Dundee Securities
Ltd., to the effect that the consideration is fair to Bedrocan
Canada shareholders. PowerOne Capital Markets Limited also acted as
a financial advisor to Bedrocan Canada in connection with the
transaction. LaBarge Weinstein LLP acts as legal counsel to TMI and
Cassels Brock & Blackwell acted as legal counsel to
Bedrocan Canada in connection with the transaction. TMI has engaged
GMP Securities L.P. to provide a fairness opinion to TMI in
connection with the transaction.
Analyst Call
A conference call has been scheduled to discuss the transaction.
Bruce Linton, Chairman and CEO of
TMI, Marc Wayne, President and CEO
of Bedrocan Canada, and Tim
Saunders, CFO of TMI will outline the details of the
transaction and conduct a Q&A session.
Date and Time: 8:00 am ET,
Wednesday, June 24th,
2015
Conference Dial-in: 1.855.859.2056
Conference ID: 72579692
About Tweed Marijuana, Inc.
Tweed Marijuana is Canada's
first publicly traded medical marijuana company and the first
geographically diversified producer with dual licenses under Health
Canada's Marihuana for Medical Purposes Regulations. Through
its wholly owned subsidiaries, Tweed Inc. and Tweed Farms Inc., the
company operates two state-of-the-art production facilities in
Ontario and distributes marijuana
across the country to Canadian patients managing a host of medical
conditions.
The company is dedicated to educating healthcare practitioners,
providing consistent access to high quality medication, and
furthering the public's understanding of how marijuana is used for
medical purposes. www.tweed.com
About Bedrocan Cannabis Corp.
Bedrocan Cannabis Corp. (Bedrocan Canada) is focused on clinical
research, technologically-advanced, automated production processes,
and innovative product development. Bedrocan Canada and its
licensor Bedrocan Beheer BV (Netherlands) are the only companies in the
world currently capable of producing standardized full-bud,
pharmaceutical-grade medicinal cannabis. Bedrocan Beheer BV has
been producing and supplying government-regulated medicinal
cannabis for 13 years. www.bedrocan.ca
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.
Forward Looking Statements
This news release contains "forward-looking information" and
"forward-looking statements" within the meaning of applicable
Canadian securities legislation. Forward-looking information
includes, but is not limited to, statements regarding the proposed
acquisition, anticipated timing for the closing of the acquisition,
operations of the combined entity, the ability of the combined
entity to expand and capture market share. Forward-looking
statements are necessarily based upon a number of estimates and
assumptions that, while considered reasonable by management, are
inherently subject to significant business, economic and
competitive uncertainties and contingencies. Forward-looking
statements involve known and unknown risks, uncertainties and other
factors that may cause actual financial results, performance or
achievements to be materially different from the estimated future
results, performance or achievements expressed or implied by those
forward-looking statements and the forward-looking statements are
not guarantees of future performance. All forward-looking
information contained in this news release is given as of the date
hereof and is based upon the opinions and estimates of management
and information available to management as at the date hereof. The
closing of the proposed acquisition is subject to a number of
conditions, some of which are outside the control of the parties
involved. If those closing conditions are not satisfied the
transaction may not occur. The combined entity may not be able to
achieve the market growth and success anticipated by the parties.
For a description of the risks associated with the business
conducted by TMI, please refer to TMI's final short-form prospectus
dated March 10, 2015. The
information circular delivered to shareholders of Bedrocan will
contain additional disclosure about TMI and the proposed
acquisition including the risk factors associated therewith.
Except as required by law, the Company disclaims any obligation to
update or revise any forward-looking statements, whether as a
result of new information, events or otherwise. Readers are
cautioned not to put undue reliance on these forward looking
statements. This news release contains information obtained by the
Company from third parties, including but not limited to market
data. The Company believes such information to be accurate but has
not independently verified such information. To the extent such
information was obtained from third party sources, there is a risk
that the assumptions made and conclusions drawn by the Company
based on such representations are not accurate.
SOURCE Tweed Marijuana Inc.