VANCOUVER, Nov. 20, 2018 /CNW/ - Organto Foods Inc.
(TSX-V: OGO, OTC: OGOFF) ('Organto"). Further to the
press release of November
1st, 2018, Organto is pleased to report that it
has completed the acquisition of 100% of the outstanding shares of
Medicannabis S.A.S. ("Medicannabis"), a privately held
Colombian medicinal cannabis company that is a late stage applicant
for licenses to enable it to cultivate and process cannabis in
Colombia. Organto is also pleased to announce that Mr.
Todd Dalotto, a seasoned
horticulturalist with deep experience in cannabis has agreed to
join Organto as the President of its newly formed Global Cannabis
Division.
"We are excited to have entered the medicinal cannabis market
via the acquisition of 100% of the outstanding shares of
Medicannabis" commented Steve
Bromley, Chair and Interim Chief Executive Officer of
Organto Foods Inc. "Legalization of cannabis is a global trend
presenting significant opportunities, and we believe that
Latin America presents a unique
opportunity to establish low-cost natural growing operations. We
believe that the addition of medicinal cannabis to our portfolio of
products is a logical and complimentary extension to our existing
business, leveraging our diverse sourcing, processing, import,
export, retail and organic certification expertise."
TERMS OF ACQUISITION OF MEDICANNABIS
In connection with the acquisition Organto will, subject to the
final acceptance of the TSX Venture Exchange, issue up to 8,000,000
shares (the "Shares") to the original shareholders of Medicannabis
upon receipt of a cultivation license, which is one of a number of
licenses that Medicannabis has applied for. Organto will
seek shareholder approval via shareholder consent resolutions, and
is confident this can be obtained in a timely manner. The Shares
will be subject to a four month hold period under applicable
securities regulations and also be subject to contractual release
limitations over a three-year period. Organto intends to pay a
finder's fee in connection with the acquisition of Medicannabis via
the issuance of common shares in accordance with the policies of
the TSX Venture Exchange.
APPOINTMENT OF TODD DALOTTO AS GLOBAL CANNABIS DIVISION
PRESIDENT
Mr. Todd Dalotto has been
appointed President of Organto's Global Cannabis Division.
Mr. Dalotto is a horticultural scientist, public policy consultant,
and court-qualified expert witness specializing in cannabis.
His experience includes horticultural research, teaching, and
consulting businesses on the horticultural science and public
policy of cannabis. His cannabis activities during the past
nineteen years include breeding of in-bred lines, morphology,
sustainable practices, mutualisms, and hoop-house cannabis
production. He created the curriculum for the Cannabis
Horticultural Science Course, which is a certificate course on core
horticultural science topics such as Soil Science, Seed Biology,
Plant Pathology, Breeding & Genetics, and more.
Mr. Dalotto has a horticultural research degree with an emphasis
on sustainable agriculture and plant breeding from Oregon State University. He is the former Chair of
the Oregon Health Authority's Advisory Committee on Medical
Marijuana (ACMM), and of the ACMM's Horticulture, Research &
Safety Committee. He currently serves on Americans for Safe
Access' Patient-Focused Certification Review Board, on the Cannabis
Certification Council's Technical Advisory Committee, and on
various legislative advisory committees for the State of
Oregon. Mr. Dalotto was instrumental in the drafting of the
regulations for Oregon's Medical Marijuana Dispensary Program, and
he founded one of Oregon's first
cannabis medical clinic.
ORGANTO'S UNIQUE AND PROPRIETARY CANNABIS VARIETIES
As part of the Medicannabis transaction, Organto has acquired 18
unique and proprietary cannabis varieties and breeding lines
developed by Todd Dalotto over the
past 19 years for Pacific Northwest environments. These varieties
and breeding lines are being cross-bred with Colombian varieties
that have been developed for tropical mountain climates by
Medicannabis and other breeders, in order to develop varieties that
perform well in equatorial regions around the world and exhibit
qualities of aroma, flavor, and medicinal efficacy that cannabis
connoisseurs expect. These proprietary breeds and strains,
uniquely adapted for the region, will allow for a more successful
and trouble-free crop.
This cross-breeding of northern-latitude and equatorial
varieties represents the beginning of Organto's diverse and
exclusive IP seed library, which includes high-THC, high-CBD, and
auto-flowering varieties, as well as those that exhibit important
minor cannabinoids, such as CBG and THCV. Organto's advanced
breeding program will allow unique and proprietary varieties to be
used in production, while simultaneously positioning Organto as a
global supplier of high-quality cannabis cultivars adapted for
equatorial regions.
"The cultivars we develop from our diverse genetic library will
exhibit both the horticultural qualities that make for a successful
crop in equatorial regions as well as the high potency, flavor,
aroma and medicinal properties that consumers have come to expect
from North American and European producers." said Todd
Dalotto, President of Organto's Global Cannabis Division. "As
cannabis production expands in the world's equatorial regions in
the coming years, Organto will be poised to be an important
supplier of high-quality, equatorially-adapted cannabis seeds
around the world."
LOCATION AND LAND
Organto's applications provide for initial growing and
processing operations to be carried-out on the 1.23-hectare Buena
Vista Farm located within the Municipality of Guasca, in Guavio
Province, Cundinamarca Department. Under certain conditions,
the regulatory framework allows for land to be added to an existing
licence in the same location or at a different location, with a
simple amendment. A lease for the Buena Vista Farm has been
executed, to take effect on the day that a cultivation licence is
granted. The lease carries a 5-year term with up to four
automatic renewals. Organto intends to expand growing in the
region beyond the Buena Vista Farm as operations are scaled over
the next twelve to eighteen months. Guasca is located
approximately 50 km from Bogota
the capital and largest city in Colombia, with a population of approximately
10 million people. The main highway between Guasca and
Bogota is presently being upgraded
and when completed is expected to reduce the drive time in half, to
approximately 45 minutes. Agriculture is an important
employer in the area providing for ready access to qualified
labour. Extensive agricultural infrastructure exists in
Colombia from the flower industry,
which supplies approximately 17% of global cut-flower imports and
approximately 70% of cut-flowers imported into Canada and the
United States.
ORGANTO'S CAPEX AND OPEX ADVANTAGE
While the standard models for cannabis production facilities in
the United States and Canada are characterized as higher cost indoor
growing facilities and automated greenhouses, Organto is set to
demonstrate how its original ecological and sustainable hoop-house
cultivation design produces high-quality crops with lower
production costs & higher profits than the standard model
facility. In contrast with expensive standard-model
production facilities common to competitors in North America, Organto's innovative model,
designed by Todd Dalotto a
horticultural scientist, utilizes an inexpensive and simple
hoop-house design, which maximizes light and heat from the sun,
instead of from electrical lights & heaters, and cools by
passive ventilation and efficient fans, instead of with chillers
and air conditioners.
Organto believes their fully-equipped hoop-houses can be
constructed at under 33% of the cost of the conventional
cannabis production facilities of Canada and the United States. Also, by
utilizing free and abundant natural resources, such as planting in
native soils instead of purchasing new shipments of potting media
for each crop, and utilizing captured rainwater instead of
exclusively municipal sources, Organto expects to benefit from
significant savings in operating expenses.
Organto's greatest operating expense is labor, which in
Colombia tends to be approximately
15% of the labour cost in Canada
and the United States, hence
eliminating the need for expensive automation systems and
equipment.
ORGANTO'S CULTIVATION PHILOSOPHY
Organto believes that the current business plan pursued by the
majority of Canadian and American cannabis producers to grow
indoors and in sealed greenhouses in cleanroom conditions, is a
higher cost approach both economically, as well as ecologically, as
pests and disease thrive in indoor environments, away from their
enemies.
Organto's philosophy is to grow "Naturally" by planting
directly in well managed native fertile soils, which provides
efficient access to nutrients and moisture from a renewable
resource. Through probiotic soil management, and sustainable
and self-sufficient agricultural practices (permaculture), a
hoop-house system is managed as an ecosystem within a broader
ecosystem. Rather than creating a cleanroom environment that
is very difficult to maintain, and instead enhancing mutualistic
relationships between plants, insects, soil organisms, and humans,
the dynamic relationship results in good control of pest
populations. Use of an innovative semi-passive ventilation
system, contributes to effective disease control. Irrigating
from a pure natural water source such as rain water, enhances plant
health and reduces the risk of contamination. These methods,
combined with 120-day growth cycles from natural light (12hrs every
day in Colombia), is expected to
deliver high-yield, premium quality product, with minimal light
supplementation, at low cost.
SYNERGIES WITH ORGANTO'S EXISTING OPERATIONS
Organto is an international vertically integrated provider of
value-added organic vegetables and fruits, with extensive
logistical expertise, including trading, sourcing, processing,
packaging, shipping, distribution, and marketing. Organto
sources produce product from low-cost growing regions in
Latin America, Africa and Asia and currently sells in a number of
European countries. Organto also has considerable experience
in the organic certification process.
Organto has extensive European market expertise, and with the
global trend to legalize cannabis rapidly modifying the global
landscape, it is expected that over time the European landscape
will also evolve and open-up a potential US$65 billion cannabis market of some 740 million
people. When that happens Organto should be very well
positioned to leverage their marketplace knowledge to take
advantage of the enormous market opportunity. In the interim,
Organto's Cannabis Division will focus on offering its future
cannabis products locally in the Colombian medicinal market, and
globally in markets where cannabis related imports and sales are
fully legalized.
In addition, many consumers are seeking "socially acceptable and
healthier" ways to ingest cannabis for medicinal and recreational
purposes. Organto is well positioned for the
future to become a significant player in the cannabis-infused food
industry. Organto continues to expand its product offerings
which presently include organic blueberries, passion fruit,
avocados, ginger, asparagus, green beans, snow peas and sugar
snaps. These are basic ingredients in many recipes and
processed foods, and they are sourced by Organto directly from the
producer, hence giving Organto a very significant cost advantage
over competitors when it eventually enters the edibles segment of
the cannabis market. Edibles are forecast to be a rapidly
expanding many-billion-dollar global market.
PLANS FOR 2019
Organto expects to receive its first cultivation licence in Q1
2019 and plans to erect hoop-houses in mid-2019 for planting of
non-psychoactive (i.e. CBD) cannabis seeds and breeding trials in
late summer 2019. Under the proposed timeline the first
harvest would occur in December 2019
for initial revenues in Q1 2020. Planting of psychoactive
(i.e. THC) cannabis seeds is not expected until 2020.
Organto intends to provide further operational and
organizational updates as expected expansion plans are finalized
and the Global Cannabis leadership and advisory team is
expanded.
ON BEHALF OF THE BOARD
Steve Bromley
Chair and
Interim Chief Executive Officer
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this news release.
ABOUT ORGANTO
Organto is an integrated provider of year-round value-added
branded organic vegetables and seasonal organic and non-GMO fruit
and vegetable products serving a growing socially responsible and
health conscious consumer around the globe. Organto employs a
business model that is integrated from the "table to the field".
Driven by consumer demand for healthy and organic food products, it
operates an integrated business model with sourcing, logistical and
processing capabilities, providing complete traceability from the
table back to the field. Operations are currently located in
Guatemala, The Netherlands and the USA, as well as third-party supply from a
variety of regions, with plans to continue to expand supply
capabilities via strategic third-party growers and processors in
other growing regions. Organto's business model is rooted in its
commitment to sustainable business practices focused on
environmental responsibility and a commitment to the communities
where it operates, its people and its shareholders.
FORWARD LOOKING STATEMENTS
This news release may include certain forward-looking
information and statements, as defined by law including without
limitation Canadian securities laws and the "safe harbor"
provisions of the US Private Securities Litigation Reform Act of
1995 ("forward-looking statements"). In particular, and without
limitation, this news release contains forward-looking statements
respecting Organto's current business model and related expertise;
Organto's belief that the acquisition of Medicannabis is a logical
and complementary extension to Organto's business; Organto's belief
that legalization of cannabis is a global trend and Latin America presents a low-cost natural
growing opportunity; Organto's belief that they will be an
important supplier of high-quality, equatorially-adapted cannabis
seeds around the world; Organto's intention to expand growing
regions beyond the Buena Vista Farm; Organto's belief that
their fully equipped hoop-house facilities can be constructed at a
significant discount to conventional facilities in Canada and the USA; Organto's belief that they are
well-positioned to enter the edibles space when that market opens
up; ; Organto's belief that shareholder approval via a shareholder
consent resolution will be received in a timely manner; the timing
of receipt of the first cultivation license, build-out, planting
and harvest;; management's beliefs, assumptions and expectations;
and general business and economic conditions. Forward-looking
statements are based on a number of assumptions that are subject to
a variety of risks and uncertainties and may prove to be incorrect,
including without limitation assumptions about the following: the
continued growth in global demand for cannabis products and the
continued increase in jurisdictions legalizing cannabis, and the
timely processing of regulatory approval for the acquisition of
Medicannabis and the license applications. The foregoing list is
not exhaustive and Organto undertakes no obligation to update any
of the foregoing except as required by law.
SOURCE Organto Foods Inc.