TORONTO, Dec. 3, 2018 /CNW/ - 48North Cannabis Corp.
("48North" or the "Company") (TSXV:NRTH), a leading
licensed cannabis producer focused on next-generation cannabis
products, announced today that it has completed the previously
announced transformational acquisition of 2599708 Ontario Inc.
("Good & Green") ("Acquisition").
With this Acquisition, 48North acquires a second Licensed
Producer, as defined under the Cannabis Act, with a 2019
production footprint which it expects will make it one of the
largest and lowest-cost producers of dried cannabis, cannabis oil,
as well as a leader in next-generation cannabis infused products
including cosmetics, topicals, beverages, and edibles.
In addition, 48North announced earlier today that it completed a
$3 million strategic investment
financing agreement ("Financing Agreement") with Canopy
Growth Corporation ("Canopy Growth") (TSX:WEED, NYSE:CGC).
On October 30, 2018, 48North
announced a $10 million non-brokered
private placement ("Private Placement"), and today's Financing
Agreement with Canopy Growth, together with the previously
announced lead order of $7 million
from a leading US-based private investment fund, provides 48North
with a full commitment on the $10
million Private Placement.
As part of the Financing Agreement, 48North will issue 4 million
Units to Canopy Growth at a price of $0.75 per Unit for gross proceeds of $3 million, representing approximately 3.6% of
the issued and outstanding shares of 48North, after giving effect
to both the Private Placement and Acquisition. 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 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.
"Both of today's announcements mark a significant transformation
of 48North. This strategic acquisition of Good & Green, Private
Placement and partnership with Canopy Growth work to strengthen and
accelerate 48North's ability to deliver on its business plan," said
Alison Gordon, Co-Chief Executive
Officer at 48North. "48North is now well capitalized, fully in
control of its supply chain, a truly vertically-integrated company,
and well positioned to continue to develop next-generation cannabis
products," continued Ms. Gordon.
This Acquisition provides 48North with a total expected 2019
production of at least 45,000 kilograms of cannabis. Good &
Green's cultivation and production facilities include a 46,000
square foot indoor facility situated on five-acres of commercial
land in Brantford, Ontario, as
well as a 100-acre farm in Southwest
Ontario. This significant production footprint includes
48North's existing 2019 indoor expected production of 2,500
kilograms from DelShen Therapeutics Corp., the Company's existing
wholly-owned Licensed Producer.
As part of the Acquisition, 48North is also announcing that
Jeannette VanderMarel will become
co-CEO and join the company's Board of Directors.
"Jeannette is uniquely qualified to co-lead 48North based on her
previous experience as founder of The Green Organic Dutchman
(TSX:TGOD), one of Canada's
largest licensed producers," said Gordon. "Jeannette brings with
her a deep knowledge of both the production and retail sides of the
business, and a proven track record of delivering results."
"I am pleased to be joining the 48North team. Without question,
we are best positioned to become the industry leader in developing
cannabis brands and products with a future-focus that looks beyond
flower and oil," said Ms. VanderMarel. "48North is the
cannabis brand that people can trust. I have been in this industry
since the very beginning, and I know that there is room in the
sector for a company focused on profitability, good governance, and
diversity. I am confident that 48North can authentically deliver on
that committment."
Daniel Goldberg, CEO of Good
& Green, becomes Senior Advisor of 48North. "This is a
particularly exciting time for 48North. The combination of Good
& Green and 48North provides significant opportunities,
including the pursuit of strategic partnerships with like minded,
blue-chip companies, to fully leverage 48North's substantial and
low cost 2019 production footprint," said Goldberg.
Acquisition Highlights:
Further Strengthens a Values-Based Vertically-Integrated
Cannabis Company: 48North is a vertically-integrated cannabis
company focused on building strong brands and developing
innovative, next-generation cannabis products. The Acquisition
provides a significant increase in indoor and low-cost outdoor
cannabis production, a substantial expansion into organic cannabis
production, and further strengthens 48North's brand portfolio.
Second Licensed Indoor Cultivation and Manufacturing
Facility: The Acquisition provides an additional 46,000 square
feet of licensed indoor cultivation and manufacturing facility,
situated on five-acres of land in Brantford, Ontario. This site has an initial
production area of 14,000 square feet with another 25,500 square
feet immediately available for additional indoor cultivation, pre
and post-production, laboratory, large-scale extraction, as well as
next-generation product, research, development and manufacturing.
The Brantford indoor facility is
expected to produce 2,500 kilograms of dried cannabis in 2019.
Low-Cost 100-Acre Outdoor Cultivation Site to Provide an
Expected 40,000 Kilograms of Organic Dried Cannabis in 2019:
The Acquisition provides 48North with a 100-acre organic farm
situated in close proximity to the indoor Brantford, Ontario facility. This is in
addition to 48North's existing licensed facility in Kirkland Lake, Ontario. The farm is expected
to produce at least 40,000 kilograms of sun-grown dried cannabis in
2019. This outdoor grow has a targeted production cost of
$0.25 per gram of dried cannabis.
Good & Green submitted a cultivation license application to
Health Canada in relation to the farm in October 2018 and expects to receive that license
in early 2019. The farm will provide 48North with organic,
sun-grown cannabis and provides a significant first-mover advantage
in the production of low-cost, next-generation, extract-based
cannabis products.
Enhanced Management Team: Good & Green's strong
management team has best-in-class cultivation, facility development
and construction, government relations, marketing, and branding
experience, as well as M&A and corporate development
capabilities. Good & Green's senior team have all been involved
in the MMPR/ACMPR/Cannabis Act since its inception. Together they
have 12-plus years of experience and have developed over a million
square feet of federally-licensed cannabis cultivation space.
Complementary Portfolio of Brands: The Acquisition
provides 48North with the opportunity to leverage a combined
portfolio of authentic, socially responsible, high-quality cannabis
brands. The diversity and range of brands will increase access to
multiple demographic segments through complimentary values-driven
brands including 48North, Good & Green, Latitude and Mother
& Clone.
Grant of Stock Options
48North Cannabis Corp. has granted an aggregate of 2,410,000
stock options (each an "Option") to certain directors, officers,
and employees of the Company. The Options vest through the
passage of time or the achievement of specific goals. Each
Option is exercisable into one common share ("Share") of the
Company at a price of $0.47 per Share
for a period of 3 years from the date of grant, being November 30, 2021. All of the Options have
been granted pursuant to the Company's Stock Option Plan which has
been previously approved by the Company's shareholders and the TSX
Venture Exchange.
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 operates two indoor-licensed
cannabis production sites in Ontario with over 86,000 square feet of
production capacity. 48North cultivates unique genetics at its
wholly-owned subsidiaries, DelShen Therapeutics Corp. ("DelShen")
and Good and Green Cannabis Corp. ("Good & Green"), both
Licensed Producers under the Cannabis Act. In addition, 48North
operates a 100-acre organic farm providing 48North with organic,
sun-grown cannabis and a significant first-mover advantage in the
production of low-cost, next-generation, extract-based cannabis
products. 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).
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 statements in this news release include statements relating
to the expected benefits 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 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. Additionally, this release contains
forward-looking information relating to 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, including
shareholder approval of the creation of the Preferred Shares. 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 forecasts or
projections 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.