MONTREAL, Oct. 31, 2017 /CNW Telbec/ - LGC Capital
Ltd. (TSXV: LG) ("LGC") is pleased to announce that it has
signed an option with Quebec based
Tricho-Med Corporation, doing business as AAA Trichomes (AAA
Trichomes) to acquire a 49% interest (plus a 5% royalty) in a
new cannabis processing facility to be built in the Province of
Quebec.
Subject to permitting, the AAA Trichomes processing facility
will be one of the first enclosed multi-level medical cannabis
producers in Quebec. Trichomes is
scheduled to start operations in 2019 with an initial annual
production rate of over 2,500 kilograms reaching a planned
production rate of over 20,000 kilograms by 2021.
"This is LGC's first deal directly in the Canadian
cannabis sector and hopefully the first of a number of Canadian
deals the Company is looking at taking a strategic investment."
Commented John McMullen, LGC
Capital's CEO. "This deal is on the back of our recent investment
in Little Green Pharma, one of Australia's fully licensed and permitted
medical cannabis companies that is moving rapidly towards planting
its first commercial crop (/or - has just planted its first
commercial crop). We are also progressing well with our due
diligence process on our potential investment in South Africa's House of Hemp, having now
completed 3 months of the due diligence on this exciting
business."
Under the terms of the exclusive option agreement, LGC plans to
fund the building of the facility by way of a $4 million fully secured convertible debenture
bearing interest at the rate of 10% per annum. Upon the facility
being approved for cannabis cultivation and production, the
debenture will automatically be converted to a 49% holding in the
issued common share capital of Trichomes as well as a 5% royalty on
all net sales of cannabis products.
AAA Trichomes was incorporated in 2014 with the objective of
becoming a manufacturer and distributor of cannabis products in
Canada with an initial focus on
Quebec market. Since November 2016, AAA Trichomes has been in the
final review stage with Health Canada for the processing of its
application to become a licensed producer under the Access to
Cannabis for Medical Purposes Regulations.
The critical path in this transaction calls for due diligence to
be completed by November
15th with a closing on an initial funding of
$2 Million to take place on
November 24th of this
year. Conditions precedent to closing include, inter alia,
execution and delivery of all definitive agreements relating to the
convertible debentures, the net sales royalty and registration of
securities against the assets of the Borrower. LGC plans to fund
this investment over the construction period from current cash
reserves and from Institutional debt.
Closing is also conditional upon LGC having obtained all
requisite regulatory and TSX Venture Exchange approvals.
About LGC (www.lgc-capital.com):
LGC Capital Ltd. is a Canadian incorporated public company
listed on the TSX Venture Exchange (TSXV: LG). LGC's objective is
to become a diversified business group with core business divisions
that provide shareholders with exposure to a diverse range of
businesses, products and services.
FORWARD-LOOKING STATEMENTS
This press release may contain forward-looking statements with
respect to LGC Capital Ltd. ("LGC"), its investment in AAA
Trichomes Inc., and LGC's operations, strategy, investments,
financial performance and condition. These statements generally can
be identified by use of forward-looking words such as "may",
"will", "expect", "estimate", "anticipate", "intends", "believe" or
"continue" or the negative thereof or similar variations. The
actual results and performance of LGC, including its proposed
investment in AAA Trichomes Inc., could differ materially from
those expressed or implied by such statements. Such statements are
qualified in their entirety by the inherent risks and uncertainties
surrounding future expectations. Some important factors that could
cause actual results to differ materially from expectations
include, among other things, general economic and market factors,
competition, government regulation and the factors described under
"Risk Factors and Risk Management" in LGC's Management's Discussion
and Analysis for the fiscal year ended September 30,
2016, as filed on SEDAR (www.sedar.com). The cautionary statements
qualify all forward-looking statements attributable to LGC and
persons acting on its behalf. Unless otherwise stated, all
forward-looking statements speak only as of the date of this press
release and LGC has no obligation to update such statements, except
to the extent required by applicable securities laws.
Information Relating to AAA Trichomes
Inc.:
All information contained in this press release relating to AAA
Trichomes Inc. has been provided to LGC by AAA Trichomes
Inc.. LGC has relied upon this information without having made
independent inquiries as to its accuracy or completeness and
assumes no responsibility for any inaccuracy or incompleteness of
such information.
Caution Regarding Press Releases
Neither the TSX Venture Exchange nor its Regulation Service
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE LGC Capital Ltd