TORONTO, July 18, 2018 /PRNewswire/ - Cronos Group Inc.
(NASDAQ: CRON) (TSX: CRON) ("Cronos Group" or
the "Company"), is pleased to announce that it has entered
into a joint venture partnership with a group of investors led by
Bert Mucci (the "Greenhouse
Partners"), one of Canada's
most sophisticated greenhouse operators and builders. This
partnership will function through a newly formed entity, Cronos
Growing Company Inc. ("Cronos GrowCo"), which will develop,
construct and operate a state-of-the-art purpose-built greenhouse
for cannabis production in Kingsville,
Ontario.
Cronos GrowCo is a 50/50 partnership between the Company and the
Greenhouse Partners. It will leverage over three decades of
Bert Mucci's experience in
designing, building and operating sophisticated large-scale
greenhouses. Bert Mucci, has a long
history of greenhouse growing experience and will bring a wealth of
knowledge and expertise to this collaboration. He has made
significant contributions to the horticultural industry in
Canada, including investments in
innovative technologies and environmental stewardship. With a
proven track record of growth and expansions in vertically
integrated operations - from seed to package. Bert Mucci has overseen thousands of employees
and over 200 acres of fruit and vegetable greenhouses in
southwestern Ontario.
Cronos GrowCo plans to develop an approximately 850,000 square
foot custom-built greenhouse (the "Facility") on about 100
acres of land owned by Cronos GrowCo in the established greenhouse
region of Kingsville, Ontario. The
Leamington/Kingsville region of Ontario is home to the largest concentration
of greenhouses in North America
and is commonly referred to as the "Sun Parlour," since the area
boasts one of the warmest climates in Canada. The greenhouse materials are currently
on the production site and construction will begin this summer.
Cronos Group expects that once the Facility is fully operational
and licensed, the Facility will produce approximately 70,000
kilograms of cannabis per annum for Cronos GrowCo. The state-of-the
art Facility has been designed to optimize cutting-edge greenhouse
technology and Cronos Group's best practices in cannabis
cultivation coupled with the latest in efficient environment
control technologies. This is expected to provide ideal and
consistent environmental conditions for cannabis cultivation in an
energy efficient manner. The Facility is also designed to meet GAP
and GMP requirements and standards for cultivation, extraction and
manufacturing activities.
The Company will assist Cronos GrowCo in obtaining any necessary
Health Canada licenses for its operations and provide Cronos GrowCo
access to Cronos Group's domestic and international distribution
channels through a supply agreement that has been entered into.
Greenhouse Partners will contribute its large-scale greenhouse
design, build and operational expertise. Each partner will
contribute capital as required to Cronos GrowCo for operations.
Cronos GrowCo currently expects to utilize debt to fund a portion
of the Facility build-out. Construction of the Facility remains
subject to obtaining the necessary funding, the relevant building
permits and other customary approvals and commencement of
operations at the Facility will be subject to obtaining the
appropriate licenses under applicable law.
"We believe this partnership serves as a textbook illustration
of our strategy and how Cronos Group plans to execute on a global
scale," said Mike Gorenstein, CEO of
Cronos Group. "It leverages the data and intellectual property we
have been creating at Peace Naturals, our center of excellence, to
create capacity and operating leverage in Canada with a premier expert in greenhouse
execution, all accomplished in a capital efficient
manner."
"I am very excited to be personally investing in this
initiative," said Bert Mucci. "I am
confident that Cronos GrowCo has put together a unique and talented
management team of experts with over 50 years of combined
experience to execute our vision. This management team shares my
passion and is dedicated to making an impact on health and wellness
in the 21st century."
"Cronos is thrilled to be partnering with the Greenhouse
Partners. Bert Mucci's experience
and execution with large scale commercial agriculture is second to
none," said David Hsu, COO of Cronos
Group. "This is a perfect fit, as all parties are committed to
commercial efficiencies, technological innovations and most
importantly, the highest quality products. This partnership
combines the regional expertise of high tech greenhouses, cannabis
cultivation best practices and customizing the latest automation
technology developed for commercial agriculture."
About Cronos Group
Cronos Group is a globally
diversified and vertically integrated cannabis company with a
presence across four continents. The Company operates two
wholly-owned Canadian licensed producers regulated under Health
Canada's Access to Cannabis for Medical Purposes
Regulations: Peace Naturals Project Inc., which was the
first non-incumbent medical cannabis license granted by Health
Canada, and Original BC Ltd., which is based in the Okanagan
Valley, British Columbia. The
Company has multiple international production and distribution
platforms including in Germany,
Israel and Australia. The Company intends to continue to
rapidly expand its global footprint as it focuses on building an
international iconic brand portfolio and develop disruptive
intellectual property. Cronos Group is committed to building
industry leading companies that transform the perception of
cannabis and responsibly elevate the consumer experience.
Forward-looking statements
This news release contains
"forward-looking information" and "forward-looking statements"
within the meaning of applicable Canadian and U.S. securities laws.
All information contained herein that is not clearly
historical in nature may constitute forward-looking information.
In some cases, forward-looking statements can be identified
by words or phrases such as "may", "will", "expect", "plan",
"anticipate", "intend", "potential", "estimate", "believe" or the
negative of these terms, or other similar expressions intended to
identify forward-looking statements. Some of the forward-looking
statements contained in this press release, include the
development, construction and operation of the Facility, the nature
of the Facility and its operations, including that its operations
will be in an energy efficient manner, anticipated size and
capacity of the Facility, the receipt of necessary funding,
building permits and other approvals, including applicable
production and sales licenses, for the construction and operation
of the Facility, the expectation that construction of the Facility
will be funded with debt and the partnership with create capacity
and operating leverage in a capital efficient manner,, the
Company's ability to supply international markets, the Company's
intention to continue to rapidly expand its global footprint, build
an international iconic brand portfolio and develop disruptive
intellectual property. 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 risks, uncertainties
and contingencies 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. A
discussion of some of the material risks applicable to the Company
can be found in the Company's current MD&A and Annual
Information Form, both of which have been filed on SEDAR and can be
accessed at www.sedar.com. The forward-looking information included
in this news release is made as of the date of this news release
and, except as required by law, Cronos Group disclaims any
obligation to update or revise any forward-looking statements.
Readers are cautioned not to put undue reliance on these
forward-looking statements.
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SOURCE Cronos Group Inc.