Investment solidifies Organigram's commitment
to next generation delivery
of cannabinoid products to global medical and adult recreational
cannabis markets
MONCTON, NB, Sept. 13,
2018 /CNW/ - Organigram Holdings Inc. (TSX VENTURE: OGI) (OTCQX:
OGRMF), the parent company of Organigram Inc. (the "Company"
or "Organigram"), a leading licensed producer of medical
marijuana, is pleased to announce the closing of its strategic
investment in convertible secured debentures (the
"Debentures"), to be purchased in three tranches and valued
in the aggregate at $10 million, of
Hyasynth Biologicals Inc. ("Hyasynth"), a biotechnology
company based in Montreal and
leader in the field of cannabinoid science and biosynthesis.
Hyasynth's patent-pending enzymes, yeast cells and processes
make it possible to produce phytocannabinoids and phytocannabinoid
analogues in genetically modified strains of yeast.
Hyasynth's proprietary enzymes and yeast strains have to date
allowed them to make CBG, CBD and other cannabinoids for novel and
specialized products, including vapourizable cannabis products and
cannabis-infused beverages, as well as pharmaceutical ingredients,
for a fraction of the cost of traditional plant-based
production. The company will continue to develop a
comprehensive platform of cannabinoids beyond THC, CBD and CBG for
both medical and recreational use.
"Hyasynth's technology offers us access to the future of
cannabinoid production today," says Greg
Engel, CEO, Organigram. "We know that cost-efficiency and
scalability will be necessary to meet the needs of the Canadian and
the global cannabis markets. Working with Hyasynth, we can throw
out old assumptions about the scale, speed and precision with which
we can produce both extract-based medical products and a
comprehensive and diverse range of recreational use products like
edibles and beverages."
Engel adds that while there will always be a market for premium,
indoor grown cannabis flowers, the opportunity to utilize large
scale production of cannabinoids through bio-fermentation that is
not dependent on the weather or the variations inherent in a
traditional growing cycle will fundamentally change the global
cannabis industry. "Working with Hyasynth there are now few limits
on how quickly we can respond to market demand for cannabinoid
based recreational and medical products."
Hyasynth has previously demonstrated their production method for
a range of cannabinoids at a small scale under a research exemption
from Health Canada. They have recently received a Dealer's License
from Health Canada which enabled them to expand their work beyond
research and into production.
The funding provided by Organigram, the largest announced direct
investment in this kind of cellular agriculture technology in
Canada, will allow the company to
refine and optimize their processes at scale via a contract
manufacturer as well as fund a purpose-built manufacturing facility
for production. In conjunction with Organigram's purchase of
Debentures, Organigram and Hyasynth have entered into an agreement
that allows Organigram to purchase a significant quantity of
cannabinoids produced by Hyasynth.
"We are proud to work with Organigram and make this
transformative technology available to the Canadian and global
cannabis industry," says Kevin Chen,
CEO, Co-founder, Hyasynth. "Applying our research to the
engineering of cannabinoid-based products means we can help
companies like Organigram create more, better and more accessible
products, while also essentially eliminating product shortages. Our
goal is to not only contribute to the evolution of a new industry
but to also help take care of the people who use and rely on these
products."
Pursuant to a debenture purchase agreement dated as of today's
date (the "Debenture Purchase Agreement") among Hyasynth,
Organigram and certain other investors purchasing debentures
concurrently with Organigram (the "Investors"), Organigram has
purchased $5 million in secured
convertible 8% debentures, and Organigram will purchase up to an
additional $5 million of Debentures
of Hyasynth in a series of two other tranches of $2.5 million each based on Hyasynth attaining
certain funding milestones and the satisfaction of certain other
customary closing conditions.in respect of tranches two and three.
Under the terms of the Debenture Purchase Agreement, the principal
amount of the outstanding Debentures (but not interest) are
convertible from time to time into common shares of Hyasynth at the
option of the holder. In addition, in certain circumstances
described in the Debenture Purchase Agreement, the principal amount
of outstanding Debentures (but not interest) shall be automatically
converted into common shares of Hyasynth upon the occurrence of
certain events. Each such conversion will be at the various
conversion prices applicable to each tranche of Debentures
specified in the Debenture Purchase Agreement, which such
conversion prices shall be subject to adjustment in accordance with
the terms and conditions of the Debenture Purchase Agreement. If
not converted, the principal amount of the Debentures, accrued
interest, and other amounts payable thereunder mature on
August 31, 2023, unless such maturity
is accelerated in accordance with the provisions of the Debenture
Purchase Agreement. Upon conversion, and if fully converted, the
Hyasynth common shares issued to Organigram would represent a
substantial interest in Hyasynth based on the current
capitalization structure for Hyasynth, provided that such
capitalization structure remains as such at the time of
conversion. Organigram also has been granted certain investor
rights and board representation. Organigram and the other Investors
have been granted a security interest over the assets of Hyasynth
as security for Hyasynth's obligations under the Debentures.
About Organigram Holdings Inc.
Organigram Holdings Inc. is a TSX Venture Exchange listed
company whose wholly owned subsidiary, Organigram Inc., is a
licensed producer of cannabis and cannabis-derived products in
Canada.
Organigram is focused on producing the highest-quality,
indoor-grown cannabis for patients and adult recreational consumers
in Canada, as well as developing
international business partnerships to extend the company's global
footprint. In anticipation of the legal adult use recreational
cannabis in Canada, Organigram has
developed a portfolio of brands including The Edison Cannabis
Company, Ankr Organics and Trailer Park Buds. Organigram's primary
facility is located in Moncton, New
Brunswick and the Company is regulated by the Access to
Cannabis for Medical Purposes Regulations ("ACMPR").
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
This news release contains forward-looking information which
involves known and unknown risks, uncertainties and other factors
that may cause actual events to differ materially from current
expectations. Important factors - including the availability of
funds, consummation of definitive documentation, the results of
financing efforts, crop yields - that could cause actual results to
differ materially from the Company's expectations are disclosed in
the Company's documents filed from time to time on SEDAR (see
www.sedar.com). Readers are cautioned not to place undue reliance
on these forward-looking statements, which speak only as of the
date of this press release. The Company disclaims any intention or
obligation, except to the extent required by law, to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
For more information on Organigram please visit:
www.Organigram.ca
SOURCE OrganiGram