SMITH FALLS, ON AND TORONTO,
Dec. 3, 2018 /CNW/ - 48North Cannabis
Corp. ("48North") (TSXV:NRTH) announced today that it has
entered into two agreements with Canopy Growth Corporation
("Canopy Growth") (TSX:WEED, NYSE:CGC), a strategic
investment financing ("Financing Agreement") and partnership
and supply agreement ("Supply Agreement").
Under the Supply Agreement, 48North will supply Canopy Growth
with dried cannabis produced from high-grade, unique genetics,
grown at 48North's wholly-owned facility, DelShen Therapeutics
Corp. ("DelShen"). The total volume of the Supply Agreement
is estimated to be a minimum of 1,200 kilograms and deliverable
over the course of 12 months. The first 100-kilogram transfer under
the Supply Agreement is expected to ship from 48North's DelShen
facility to Canopy Growth by December 5,
2018.
Under the Financing Agreement, Canopy will invest $3 million into 48North and receive 4,000,000
Common Units ("Units") at $0.75 per
Unit. 48North will issue each Unit at $0.75 to Canopy Growth for $3 million, representing approximately 3.4% of
the issued and outstanding shares. Each Unit will be comprised of
one Common Share and one quarter Common Share Purchase Warrant
(each whole Common Share Purchase Warrant, a "Warrant"). Each full
Warrant will entitle the holder to acquire an additional Common
Share of 48North for a period of 12 months from the date of issue
at a strike price of $1.15, provided
that, the expiry of the warrants can be accelerated if the closing
price of 48North's common shares on the TSX Venture Exchange
("TSXV") is at least $1.50 for a
minimum of 10 consecutive trading days and a notice of acceleration
is provided, in accordance with the terms of the warrant, to a date
30 days after the date of the notice.
The Supply Agreement further states that Canopy Growth will work
with 48North on a non-binding but best-effort basis to establish a
national retail presence for its products in Tokyo Smoke and Tweed
stores.
"The strategic partnership between 48North and Canopy Growth, a
world-leading cannabis company, is a testament to the quality,
diversity and consistency of our production, as well as the
strength of our branding and product development," said
Alison Gordon, Chief Executive
Officer of 48North. "The $3 million
equity financing completes our $10
million private placement and will help us build out our
next generation of cannabis products. The Supply Agreement provides
significant near-term revenue, along with future retail
distribution options for 48North's branded cannabis,
cannabis-accessories and next-generation products."
"Through CraftGrow and Canopy Rivers we've always sought
supplemental sources of supply in order to offer customers a
diverse range of products," said Mark
Zekulin, President & Co-CEO, Canopy Growth. "By adding
48North to the broader repertoire we'll strengthen our ability to
bring exciting cannabis products to market. By acquiring a stake in
48North we recognize the strength of their management team and
their ability to successfully launch into the Canadian cannabis
market."
About 48North:
48North Cannabis Corp. (TSXV: NRTH) is a
vertically-integrated cannabis company focused on the health and
wellness market through cultivation and extraction, as well as the
creation of innovative, authentic brands for next-generation
cannabis products. 48North is developing formulations and
manufacturing capabilities for its own proprietary products, as
well positioning itself to contract manufacture similar products
for third parties. 48North cultivates unique genetics
from the Netherlands at
its wholly-owned subsidiary, DelShen Therapeutics Corp.
("DelShen"), a Licensed Producer under the Cannabis Act. DelShen
is authorized to cultivate and sell cannabis as well as
extract oil from its 40,000 square foot indoor facility near
Kirkland Lake,
Ontario. 48North has a growing portfolio of brands that
include Latitude, a women's cannabis platform (explorelatitude.com)
and Mother & Clone, a rapid-acting sublingual cannabis
nanospray (momandclone.com).
On October 30, 2018 48North
announced a letter agreement for the acquisition of 2599708 Ontario
Inc. ("Good & Green"), a Licensed Producer under the Cannabis
Act. Good & Green has a 46,000 square foot indoor cultivation
and production facility in Brantford,
Ontario and recently submitted a cultivation license
application to Health Canada in connection with its 100-acre
outdoor farm in Southwest
Ontario.
About Canopy Growth
Canopy Growth is a world-leading
diversified cannabis and hemp company, offering distinct brands and
curated cannabis varieties in dried, oil and Softgel capsule forms.
From product and process innovation to market execution, Canopy
Growth is driven by a passion for leadership and a commitment to
building a world-class cannabis company one product, site and
country at a time. The Company has operations in 12 countries
across five continents. The Company is proudly dedicated to
educating healthcare practitioners, conducting robust clinical
research, and furthering the public's understanding of cannabis,
and through its partly owned subsidiary, Canopy Health Innovations,
has devoted millions of dollars toward cutting edge,
commercializable research and IP development. Through partly owned
subsidiary Canopy Rivers Corporation, the Company is providing
resources and investment to new market entrants and building a
portfolio of stable investments in the sector. From our historic
public listing on the Toronto Stock Exchange and New York Stock
Exchange to our continued international expansion, pride in
advancing shareholder value through leadership is engrained in all
we do at Canopy Growth. Canopy Growth has established partnerships
with leading sector names including cannabis icon Snoop Dogg,
breeding legends DNA Genetics and Green House seeds, and Fortune
500 alcohol leader Constellation Brands, to name but a few. Canopy
Growth operates ten licensed cannabis production sites with over
4.3 million square feet of production capacity, including over
500,000 square feet of GMP certified production space. For more
information visit www.canopygrowth.com
DISCLAIMER & READER ADVISORY
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accept responsibility for the adequacy or
accuracy of this release.
Certain statements contained in this press release constitute
forward-looking information. These statements relate to future
events or future performance. The use of any of the words "could",
"intend", "expect", "believe", "will", "projected", "estimated" and
similar expressions and statements relating to matters that are not
historical facts are intended to identify forward-looking
information and are based on the parties' current belief or
assumptions as to the outcome and timing of such future events.
Actual future results may differ materially. Forward looking
information in this news release includes statements relating to
the minimum amount supplied under the Supply Agreement, timing for
deliveries under the Supply Agreement, the Financing, including the
timing and ability of the Company to obtain an outdoor cultivation
license through Health Canada, close the Financing, if at all, the
gross proceeds of the Financing, and the timing and ability of the
Company to obtain all necessary approvals, the establishment of a
national retail presence for 48North products in Tokyo Smoke and
Tweed stores, the build out of 48North's next generation of
cannabis products, Canopy Growth's ability to bring exciting
cannabis products to market, the expected benefits of the
Acquisition and the timing for closing of the Acquisition. Such
statements are subject to risks and uncertainties that may cause
actual results, performance or developments to differ materially
from those contained in the forward-looking statements, including
production and construction risks, licensing and regulatory risks,
customer acquisition risks, the possibility that the Acquisition
will not be completed, or that 48North may not derive the expected
benefits from the Acquisition described in this news release. The
business of the Company is subject to a number of material risks
and uncertainties. Please refer to the Company's SEDAR filings for
further details. Various assumptions or factors are typically
applied in drawing conclusions or making the statements set out in
forward-looking information. Those assumptions and factors are
based on information currently available to the parties. The
material factors and assumptions include the Company being able to
obtain the necessary corporate, regulatory and other third parties
approvals, and licensing and other risks associated with the
Cannabis Act. The forward-looking information contained in this
release is made as of the date hereof and the parties are not
obligated to update or revise any forward-looking information,
whether as a result of new information, future events or otherwise,
except as required by applicable securities laws. Because of the
risks, uncertainties and assumptions contained herein, investors
should not place undue reliance on forward looking information. The
foregoing statements expressly qualify any forward-looking
information contained herein.
SOURCE 48North Cannabis Corp.