Fourfold capacity expansion supports future
adult-use demand and international growth
MARKHAM, ON, April 12, 2018 /CNW/ - MedReleaf Corp. (TSX:LEAF)
("MedReleaf" or the "Company"), Canada's first and only ISO 9001 and ICH-GMP
certified cannabis producer, today announced that it has closed its
previously announced agreement to acquire 1 million square feet of
existing greenhouse infrastructure on a 69 acre property in
Exeter, Ontario ("Exeter
Facility") and 95 acres of adjacent land. The total purchase price
for the transaction is approximately $26
million, consisting of $21.5
million in cash and 225,083 common shares of MedReleaf.
"MedReleaf is advancing on all fronts through focused capacity
expansion, innovative brand and product development, and
significant supply agreements that reinforce our position as one of
the leading producers of premium cannabis to the Canadian adult-use
and global medical markets," said Neil
Closner, CEO of MedReleaf. "The Exeter Facility expansion
will add timely capacity to support market share leadership in our
target segments while maximizing long-term return on invested
capital."
Work to retrofit the Exeter Facility for cannabis production
will begin in April with first harvest expected in the first
quarter of 2019, subject to receipt of a licence from Health
Canada. MedReleaf is fully funded to complete the project with cash
on hand. The Exeter Facility, after full retrofit, will have annual
production capacity of up to 105,000 kilograms, increasing
MedReleaf's fully funded annual production capacity to 140,000
kilograms.
Highlights:
- Strategically positions MedReleaf with one of Canada's largest and most diverse cannabis
cultivation portfolios
- Greenhouse cultivation is ideal for producing raw material
inputs for extract production, complementing MedReleaf's
award-winning portfolio of premium indoor grown cannabis
products
- Greenhouse production at scale will lower overall unit
production costs and provide added flexibility to enhance adjusted
aggregate production contribution margin across product lines
- The Bradford expansion plan for 35,000 kilograms per year of
premium indoor production remains on track for completion by the
end of summer of 2018 and the first product is anticipated to
come from the retrofitted Exeter Facility by the first quarter of
2019
- The Exeter location has
adjacent land totaling 95 acres, which could accommodate a
greenhouse approximately 1.5 times larger than the Exeter Facility,
allowing for future capacity expansion that would leverage
investment in shared infrastructure developed as part of the
initial retrofit
About MedReleaf Corp.
Voted Top Licensed Producer at the 2017 Lift Canadian Cannabis
Awards, MedReleaf is an R&D-driven company dedicated
to innovation, operational excellence and the production of
top-quality cannabis. Sourced from around the world and
carefully cultivated in one of two state of the art ICH-GMP and ISO
9001 certified facilities in Ontario, the Company
delivers a variety of premium products for the global medical
market and is committed to serving the therapeutic needs of its
medical patients and providing a compelling product assortment for
the adult-use recreational consumer.
For more information on MedReleaf, its products, research
and how the Company is helping patients #livefree, please visit
MedReleaf.com or follow @medreleaf.
Forward Looking Statements
This press release contains "forward-looking information" within
the meaning of applicable Canadian securities legislation, which
can be identified by the use of forward-looking terminology such as
"expect", "likely", "may", "will", "should", "could", "intend",
"anticipate", "potential", "proposed", "estimate" and other similar
words, including negative and grammatical variations thereof, or
statements that certain events or conditions "may", "would" or
"will" happen, or by discussions of strategy. Forward-looking
information include estimates, plans, expectations, opinions,
forecasts, projections, targets, guidance or other statements that
are not statements of fact. The forward-looking information
contained in this press release are based upon MedReleaf's current
internal expectations, estimates, projections, assumptions and
beliefs and views of future events which management believes to be
reasonable in the circumstances, including expectations and
assumptions regarding the regulatory environment in
Canada. Forward-looking information is subject to known and
unknown risks and uncertainties, including risks and uncertainties
which could cause actual events or results to differ materially
from those described in any forward-looking information, including
risks and uncertainties relating to the closing of the acquisitions
contemplated by the Agreements (which remains subject to
satisfaction or waiver of standard conditions); obtaining all
necessary regulatory and governmental approvals, including, but not
limited to, those of Health Canada and the TSX; the completion of
the Bradford expansion plan and the related impact on the Company's
production capacity; the expected timing for completion of the
retrofit and construction of the additional facilities, and
commencement of production, at the Exeter Facility; the ability of
the Company to increase its production capacity in a financially
prudent manner; the impact of production at the Exeter Facility on
the Company's profitability; the ability of the Company to generate
returns on its capital investments; global demand for cannabis
products and the Company's ability to meet such demand; general
economic conditions; changes in the regulatory and legal
environments relating to cannabis; competition; counterparty risk;
as well as those risks and uncertainties and other cautionary
statements contained in MedReleaf's Annual Information Form
dated June 27, 2017, which is available electronically
at www.sedar.com. Any forward-looking information contained
herein speaks only as of the date on which it is given and, except
as required by law, MedReleaf does not undertake any
obligation to update or revise any forward-looking information,
whether as a result of new information, future events or
otherwise.
SOURCE MedReleaf Corp.