LGC Capital Ltd.
Symbol: TSX-V: LG
- LGC to subscribe for a $2.5
million secured debenture of Jamaican cannabis company
Global Canna Labs Limited, convertible into an initial 30%
interest, and to acquire a 5% royalty on net sales.
- The Jamaican Cannabis Licensing Authority granted Global Canna
Labs conditional approval for a Cultivator's Licence (Tier 3) (over
5 acres) on December 20, 2017.
- Global Canna Labs plans to start cultivation of its first
commercial cannabis crop by Q2 2018.
- Construction of Global Canna Labs' first dispensary is expected
to start in Q1 2018 in Montego
Bay's Hip Strip.
- Plans are also in place for Global Canna Labs to open an
on-site farm store and a dispensary in Kingston, Jamaica by the end of 2018.
MONTREAL, Jan. 26, 2018 /CNW Telbec/ - LGC Capital
Ltd. (TSXV: LG) ("LGC") is pleased to announce that it
has signed a Letter of Intent with rapidly-developing Jamaican
cannabis company Global Canna Labs Limited ("Global Canna
Labs") for a strategic investment in the Jamaican cannabis
market as part of LGC's ongoing international expansion.
The Letter of Intent with Global Canna Labs and one of its major
shareholders provides that LGC will subscribe for a $2.5 million secured debenture, convertible
into an initial 30% strategic interest in Global Canna Labs, and
will also acquire a 5% royalty on Global Canna Labs' net sales for
$2 million, payable in shares of LGC.
John McMullen, CEO of LGC
commented, "This exciting transaction with Global
Canna Labs will not only extend our global reach within the
legalized cannabis industry, it will increase LGC's investment
footprint into the lucrative Caribbean Region. We believe that our
investment will assist Global Canna Labs in achieving almost
immediate production. The potential square footage, scale and
expandability of this operation is significant and we look forward
to working closely with Global Canna Labs and its
highly-experienced team to build something quite special in
Jamaica."
Global Canna Labs Limited CEO Paul
Glavine states; "Today is a very significant
day for the medical cannabis industry in Jamaica, with LGC today showing its strong
financial commitment to jointly building a strong Jamaican brand
in-country and on the world stage. Jamaica has for a long time been very well
positioned to become a leader in the medical cannabis industry. It
has a long, rich and varied culture and a highly motivated
population. Global Canna Labs has secured a strong board, highly
specialized in security, medicine and business expertise in the
country. We have developed deeply rooted ties with the leaders in
the local economy, which will allow us to maximize our expected
production capacity of 40,000 kg annually through our current
Montego Bay facilities as quickly
as possible. We are glad to announce this partnership with LGC and
we share its Jamaican vision. With 20 years of combined industrial
experience in cultivating medical cannabis, we are now focused on
rapidly building-out our operations and becoming the largest
Caribbean producer of high grade
medical cannabis."
Transaction Details: (all amounts in Canadian
dollars)
The transaction is comprised of two parts:
- LGC will, by way of a secured convertible debenture (the
"Debenture"), invest $2.5 million
which will be disbursed in traches in accordance with the
achievement of milestones in Global Canna Labs' business plan;
and
- LGC will purchase a 5% royalty ("Royalty") on Global Canna
Labs' net sales for $2 million,
payable in shares of LGC.
The Debenture will have a four-year term, carry interest at an
annual rate of 7%, and be secured by the assets of Global Canna
Labs. The Debenture will be convertible into common shares of
Global Canna Labs and to be formed Canadian affiliate so as to
comply with Jamaican foreign ownership rules, corresponding to a
30% ownership interest in Global Canna Labs. The Debenture will be
converted immediately prior to any liquidity event.
The Royalty will also be secured by the assets of Global Canna
Labs, which will have the right to repurchase the Royalty for
$6 million.
The Letter of Intent provides that LGC will carry out an
accelerated due diligence review, to be completed by
February 15, 2018, and that upon successful completion of due
diligence, the parties will enter into definitive agreements by
February 25, 2018.
Closing of the transaction with Global Canna Labs is also
subject to the parties entering into definitive agreements and to
standard closing conditions. The transaction is subject to
regulatory approval, including that of the TSX Venture
Exchange.
About Global Canna Labs
(http://globalcannalabs.com)
Global Canna Labs is a Jamaican entity with its head office
located in Kingston, Jamaica, with
operations based in Montego Bay,
with plans to become one of the leading cultivators and processors
in Jamaica of cannabis for medical
and recreational purposes. Target production is expected to total
1,876 kg in 2018 and rising quickly to 7,741 kg annually by 2021.
These production targets can be rapidly expanded from current
targets should demand exceed supply.
The Montego Bay site comprises
a 22-acre plot with an additional 80-acre expansion opportunity on
the same plot. The location is only 10 minutes from the
Montego Bay airport and sea port
providing logistics access for facilitating global exports.
Global Canna Labs is in the final stages of acquiring a full
commercial cannabis license in Jamaica enabling clinical trials,
dispensaries, recreational sale, and medical export. On
December 20, 2017, the Cannabis
Licencing Authority of Jamaica
granted conditional approval for a Cultivator's Licence (Tier 3)
(over 5 acres).
Construction of its first 58,000 sq. feet of greenhouses is in
progress and is nearing completion, with 4 additional acres of
outdoor growth and state-of-the-art processing facility meeting GMP
and ISO standards in the current site plan. Security fencing around
the initial cultivation site covering 6 acres in total has already
been installed.
Construction of Global Canna Labs' first dispensary is expected
to start in Q1 2018 in Montego
Bay's Hip Strip. Plans are also in place for Global Canna
Labs to open an on-site farm store and its first dispensary in
Kingston by the end of 2018.
About LGC (http://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.
Information Relating to Global Canna Labs Limited
All information contained in this press release relating to
Global Canna Labs Limited has been provided to LGC by Global Canna
Labs Limited. 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.
FORWARD-LOOKING STATEMENTS
This press release may
contain forward-looking statements with respect to LGC Capital Ltd.
("LGC") and Global Canna Labs Limited, and their respective
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 and Global Canna Labs Limited 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
neither LGC nor Global Canna Labs Limited has any obligation to
update such statements, except to the extent required by applicable
securities laws.
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