- PharmaCielo will sell a broad range of extracts – including
both CBD- and THC-dominant profiles – to XPhyto Therapeutics Corp.,
for German market distribution
- Three-year agreement signed, covering a minimum delivery target
of 30,000 kg, beginning mid-2020
- GAP and ISO 9001:2015 Certifications Provide Key Quality
Confirmation to Customer
TORONTO, Jan. 27, 2020 /CNW/ - PharmaCielo
Ltd. ("PharmaCielo" or the "Company")
(TSXV: PCLO; OTCQX: PCLOF), the Canadian parent of
Colombia's premier cultivator and
producer of medicinal-grade cannabis extracts, PharmaCielo Colombia
Holdings S.A.S., announced that it has entered into a three-year
agreement (the "Agreement") with XPhyto Therapeutics Corp.
("XPhyto") (CSE:XPHY; FSE:4XT), whereby PharmaCielo
will supply medicinal-quality cannabis extract oils and isolates,
including those containing THC, to XPhyto for analysis, further
processing, product development and manufacturing at its European
Union Good Manufacturing Practice-certified ("EU GMP") facility in
Biberach in the state of Baden-Württemberg, and thereafter for sale
into the German market.
"PharmaCielo has a significant opportunity to export an
ever-expanding range of medicinal products into the German market,
including those containing THC, and we are very excited to work
with XPhyto to leverage this opportunity," said David Attard, CEO of PharmaCielo Ltd. "As
the largest medicinal cannabis marketplace in Europe, Germany is also the most demanding in terms of
product quality. Our ability to meet market requirements for
verifiable quality parameters was essential to establishing the
relationship. We expect to generate meaningful revenue through this
agreement over the next three years and are focused on continuing
the ramp-up of our sales efforts through 2020."
XPhyto is a Canadian headquartered company focused on
cannabinoid-based formulations and clinical validations. The
company owns two German subsidiaries, Bunker Pflanzenextrakte GmbH
and Vektor Pharma TF GmbH, and is expanding its current licensed
German cultivation, processing and product R&D to address
near-term medicinal product opportunities in the German
marketplace.
Hugh Rogers, CEO of
XPhyto, said, "In order to meet medicinal market demand,
XPhyto looks forward to working with PharmaCielo as the preferred
supplier for our European import and distribution business with the
industry-leading cultivation and process standards necessary to
supply premium oils and isolates for our innovative medical
cannabis products, such as oral films, transdermal patches, and
topical treatments."
The three-year Agreement is PharmaCielo's largest volume sales
agreement to date and represents its first agreement to include THC
profile products. The volume product range include minimum
99% pure CBD and THC isolates, broad spectrum oil with cannabinoids
and terpenes with 0% THC, as well as full spectrum oil with
cannabinoids and terpenes, including THC.
Exports are planned to commence in mid-2020 following completion
of necessary product range regulatory protocols. Minimum total
volume under the Agreement is approximately 30,000 kg over the
three-year period, with each year's shipments growing progressively
higher.
Delivery of products to Germany
under the Supply Agreement remains subject to the approval of the
TSX Venture Exchange (the "TSXV").
Additional Information
Pursuant to the Agreement, XPhyto granted PharmaCielo 500,000
Common Share purchase Warrants ("Warrants") with an exercise price
of $2.00 per Common Share.
As a term of the Agreement, PharmaCielo will enter into an
agreement (the "Purchase Agreement") to purchase CAD $500,000 of unsecured convertible debentures of
XPhyto (the "Debentures"), to fund expansion of its processing
capabilities. The Debentures mature two years from the date of
issue and bear interest of 8.0% per annum. The Debentures will be
convertible by PharmaCielo into 500,000 common shares of XPhyto
subject to certain XPhyto acceleration rights. The purchase of the
Debentures is subject to approval by the Canadian Securities
Exchange (the "CSE"). XPhyto will also grant PharmaCielo 500,000
Warrants with an exercise price of $1.50 per Common Share.
About PharmaCielo
PharmaCielo Ltd. (TSXV: PCLO,
OTCQX: PCLOF) is a global company, headquartered in Canada, with a focus on ethical and
sustainable processing and supplying of all natural,
medicinal-grade cannabis oil extracts and related products to large
channel distributors. PharmaCielo's principal (and wholly owned)
subsidiary is GAP-certified PharmaCielo Colombia Holdings S.A.S.,
headquartered at its nursery and propagation centre located in
Rionegro, Colombia.
The boards of directors and executive teams of both PharmaCielo
and PharmaCielo Colombia Holdings are comprised of a diversely
talented group of international business executives and specialists
with relevant and varied expertise. PharmaCielo recognized the
significant role that Colombia's
ideal location will play in building a sustainable business in the
medical cannabis industry, and the Company, together with its
directors and executives, is executing on a business plan focused
on supplying the international marketplace.
About XPhyto Therapeutics Corp.
XPhyto is a next-generation cannabis company focused on
formulation, clinical validation, and European imports,
distribution and sales. XPhyto's 100% owned subsidiary, Vektor
Pharma TF GmbH, a German narcotics manufacturer, importer and
researcher has expertise in the design, testing and manufacture of
thin film drug delivery systems, particularly transdermal patches
and sub-lingual (oral) strips. Vektor also holds a number of
narcotics licences issued by the German Federal Institute for Drugs
and Medical Devices (BfArM), including import and manufacturing
permits, as well as EU GMP lab certification. XPhyto's 100% owned
German subsidiary, Bunker Pflanzenextrakte GmbH, has been granted a
unique German cannabis cultivation and extraction licence for
scientific purposes by BfArM. Bunker has two exclusive R&D
collaboration agreements with the Technical University of
Munich, Chair of Beverage and
Brewing Technology and Faculty of Chemistry. XPhyto is pursuing
additional opportunities in Europe
including commercial cannabis cultivation, processing,
manufacturing, import, and distribution. In Canada, two exclusive 5-year engagements with
the Faculty of Pharmacy at a major Canadian university provide
certified extraction, isolation, and formulation facilities, drug
research and development expertise, as well as commercial
analytical testing capability.
Forward-Looking Statements
This press release contains forward-looking statements.
Forward-looking statements can be identified by the use of words
such as, "expects", "is expected", "intends", "believes", or
variations of such words and phrases or state that certain actions,
events or results "may" or "will" be taken, occur or be
achieved. Certain statements contained in this
news release, such as those relating to targeted export
growth volumes, targeted export sales and minimum revenue
projections under the Agreement in
2020, the timing of commercial deliveries and
expanding market delivery for THC and CBD
products in Germany, the
approval of the TSXV, the purchase of Debentures and the Warrants
under the Purchase Agreement, the approval of the
CSE, and the perceived benefits from the commercial
arrangement, are "forward-looking statements" as such term is used
in applicable Canadian securities laws. Forward-looking statements
are based on plans, expectations and estimates of management at the
date the information is provided and is subject to certain factors
and assumptions, including the ability to obtain all necessary
governmental regulatory and TSXV approval
related to the commercialization and exportation of
PharmaCielo's THC and CBD products from
Colombia to Germany, CSE approval of the issuance
of the Debentures and Warrants, that the Company's financial
condition and development plans do not change as a result of
unforeseen events, PharmaCielo's ability to meet its
obligations under the Agreement and management's ability to
execute its overall business plan. Forward-looking information is
subject to a variety of risks and uncertainties and other factors
that could cause plans, estimates and actual results to vary
materially from those projected in such forward-looking
information. Factors that could cause the forward-looking
information in this news release to change or to be inaccurate
include, but are not limited to, the risk that any of the
assumptions referred to prove not to be valid or reliable, the
regulatory regime relating to the importation of cannabis products
into the German market is
constantly evolving and as a result is subject to uncertainty, that
the market for THC and CBD products in
Germany is volatile
and could diminish the profitability in this jurisdiction, failure
to obtain necessary TSXV, CSE or applicable
government regulatory approvals, the Company may be unable to
export or distribute commercial product to its sale channels due to
economic or operational circumstances, that demand for
PharmaCielo's products in Germany
may be less than anticipated, that there may be higher than
anticipated competition in the German market, risks associated with
operating in Colombia, as well as
the other risks and uncertainties applicable to cannabis producing
companies. The Company undertakes no obligation to update these
forward-looking statements, other than as required by applicable
law.
Neither the TSXV nor its Regulation Services Provider (as that
term is defined in the policies of the TSXV) accepts responsibility
for the adequacy or accuracy of this press release.
SOURCE PharmaCielo Ltd.