TORONTO and GLIL YAM, Israel, March 15,
2022 /PRNewswire/ -- IM Cannabis Corp. (the
"Company" or "IM Cannabis") (CSE: IMCC) (NASDAQ:
IMCC), a leading medical and adult-use recreational cannabis
company with operations in Israel,
Canada, and Germany, has completed three strategic
acquisitions announced in 2021.
The acquisitions were completed through IMC Holdings Ltd.
("IMC Holdings"), a wholly-owned subsidiary of IM Cannabis
Corp. and I.M.C Pharma Ltd. ("IMC Pharma"), IMC
Holdings' wholly-owned subsidiary, following receipt of all
requisite approvals, including from the Israeli Medical Cannabis
Unit ("IMCU").
"Each of these strategic acquisitions are key progress points
for our Israeli and global expansion strategy," said Oren Shuster, Chief Executive Officer of IM
Cannabis. "Our business model enables IM Cannabis to oversee the
entire supply chain and ensure that the procurement and movement of
quality supplies across our Israeli, German, and Canadian
operations are done efficiently while providing our customers with
premium quality cannabis. The positive reputation we have built in
the industry is reflected in our increasing customer satisfaction
and consumption levels."
Transaction Details
All amounts below are in Canadian dollars unless otherwise
stated.
Vironna
IMC Holdings successfully completed the acquisition of 51% of
the outstanding ordinary shares of Revoly Trading and Marketing
Ltd., dba Vironna ("Vironna"), as first announced on
August 16, 2021 (the "Vironna
Transaction"). Vironna ranks among the top 10 single cannabis
dispensing points in Israel and is
one of the largest pharmacies in Israel serving the rapidly growing Arab
consumer segment of the medical cannabis market. The total
consideration for the Vironna Transaction was NIS 8.5 million (approximately $3.33 million[1]), of which NIS 5 million (approximately $1.96 million) was paid in cash and NIS 3.5 million (approximately $1.37 million) was paid in common shares of IM
Cannabis. For satisfaction of the cash consideration component,
NIS 3.75 million (approximately
$1.47 million) was paid at signing of
the definitive agreement and the remaining NIS 1.25 million (approximately $490,000) will be paid post-closing of the
Vironna Transaction (the "Vironna Closing Date"). In
satisfaction of the share consideration component, the Company
issued 485,362 common shares at a deemed issue price of
US$2.209 per share
(approximately $2.809[2]), calculated
based on the average closing price of the common shares of the
Company on the Nasdaq Capital Market ("Nasdaq") for the 14
trading day period immediately preceding Vironna Closing Date. The
shares issued to Vironna are subject to a staggered three-month
lockup commencing on the Vironna Closing Date.
Pharm Yarok
In addition to the Vironna Transaction, IMC Holdings completed
the acquisition of all the outstanding ordinary shares of (1) R.A.
Yarok Pharm Ltd. ("Pharm Yarok"), a leading medical cannabis
pharmacy located in central Israel; and (2) Rosen High Way Ltd. ("Rosen
High Way"), a trade and distribution centre with an IMC-GDP
license that provides medical cannabis storage, distribution
services and logistics solutions for cannabis companies and
pharmacies in Israel
(collectively, the "Pharm Yarok Transaction"), as first
announced by the Company on July 28,
2021. The acquisition of the outstanding ordinary shares of
High Way Shinua Ltd. ("HW Shinua"), an applicant for a
medical cannabis transportation license, is pending receipt of the
requisite approval from the IMCU.
The aggregate cash consideration for the Pharm Yarok Transaction
was NIS 11.9 million (approximately
$4.6 million), of which NIS 8.4 million (approximately $3.3 million) was paid at signing of the
definitive agreements and the remaining NIS
3.5 million (approximately $1.3
million) paid at closing. In connection with closing of the
Pharm Yarok Transaction, the Company completed a non-brokered
private placement with former shareholders of Pharm Yarok and Rosen
High Way. A total of 523,700 common shares were issued at a deemed
price of $2.616 for aggregate
proceeds of $1,369,999.20. The
calculation of the deemed price was based on the average closing
price of IM Cannabis' common shares on the Canadian Securities
Exchange (the "CSE") over the 8 trading day period
immediately preceding March 14, 2022.
The proceeds from the private placement will be used for working
capital purposes. None of the subscribers were Related Persons of
the Company, as such term is defined under the policies of the
CSE.
Panaxia
Lastly, IMC Holdings received the requisite IMCU approval to
acquire an IMC-GDP license for distribution of medical cannabis
(the "Panaxia GDP License Closing") from Panaxia
Pharmaceutical Industries Israel Ltd. and Panaxia Logistics Ltd.,
part of the Panaxia Labs Israel, Ltd. group of companies
(collectively, "Panaxia"). The license was acquired pursuant
to the definitive agreement first announced by the Company on
April 30, 2021 (the "Panaxia
Transaction") and assigned to IMC Pharma in accordance with its
terms. The aggregate consideration for the Panaxia Transaction was
NIS 18.7 million (approximately
$7.2 million), of which NIS 7.6 million (approximately $2.9 million) was paid in two cash instalments
and NIS 11.1 million (approximately
$4.3 million) payable in common
shares of IM Cannabis ("Panaxia Consideration
Shares").
To satisfy the share consideration component of the Panaxia
Transaction, the Company has issued a total of four instalments of
Panaxia Consideration Shares, as announced by the Company on
August 9, 2021, September 8, 2021, October
20, and November 16, 2021. The
fifth and final installment of Consideration Shares will be issued
following the Panaxia GDP License Closing. The Panaxia Transaction
includes a further option to acquire for no additional
consideration a pharmacy from Panaxia, including requisite licenses
to dispense and sell medical cannabis to patients, that the Company
has exercised ("Panaxia Pharmacy Closing"). The Panaxia
Pharmacy Closing is expected to occur in Q3 2022.
About IM Cannabis Corp.
IM Cannabis (NASDAQ: IMCC, CSE: IMCC) is a leading international
cannabis company providing premium products to medical patients and
adult-use recreational consumers. IM Cannabis is one of the very
few companies with operations in Israel, Germany, and Canada, the three largest federally legal
markets. The ecosystem created through its international operations
leverages the Company's unique data-driven perspective and product
supply chain globally. With its commitment to responsible growth
and financial prudence, and the ability to operate within the
strictest regulatory environments, the Company has quickly become
one of the leading cultivators and distributors of high-quality
cannabis globally.
The IM Cannabis ecosystem operates in Israel through its commercial relationship
with Focus Medical Herbs Ltd. ("Focus Medical"), which
cultivates, imports, and distributes cannabis to medical patients,
leveraging years of proprietary data and patient insights. The
Company also operates medical cannabis retail pharmacies, online
platforms, distribution centres and logistical hubs through IMC
Holdings in Israel that enable the
safe delivery and quality control of IM Cannabis products
throughout the entire value chain. In Germany, the IM Cannabis ecosystem operates
through Adjupharm GmbH ("Adjupharm"), where it also
distributes cannabis to pharmacies to medical cannabis patients. In
Canada, IM Cannabis operates
through Trichome Financial Corp. and its subsidiaries TJAC and MYM,
where it cultivates and processes cannabis for the adult-use market
at its Ontario, Nova Scotia, and Quebec facilities under the WAGNERS and
Highland Grow brands.
Disclaimer for Forward-Looking Statements
This press release contains "forward-looking information" and
"forward-looking statements" within the meaning of applicable
Canadian and United States
securities laws (collectively, "forward-looking information").
Forward-looking information are often, but not always, identified
by the use of words such as "seek", "anticipate", "believe",
"plan", "estimate", "expect", "likely" and "intend" and statements
that an event or result "may", "will", "should", "could" or "might"
occur or be achieved and other similar expressions. Forward-looking
information in this press release includes, without limitation,
statements relating to the receipt of additional approvals from the
IMCU, the Company's business model, increasing customer
satisfaction and consumption levels, anticipated completion of the
acquisition of HW Shinua, the non-brokered private placement to be
completed by the Company and former shareholders of Pharm Yarok and
Rosen High Way, timing for the completion of the Panaxia Pharmacy
Closing, the issuance of the fifth instalment of Panaxia
Consideration Shares, and the business and strategic plans of the
Company.
Forward-looking information is based on assumptions that may
prove to be incorrect, including but not limited to the ability of
the Company to execute its business plan and the continued growth
of the medical and/or recreational cannabis markets in the
countries in which the Company operates or intends to operate, the
Company maintaining "de facto" control over Focus Medical in
accordance with IFRS 10, Focus Medical maintaining its existing
Israeli medical cannabis propagation and cultivation licenses and
the expected decriminalization and/or legalization of adult-use
recreational cannabis in Israel.
The Company considers these assumptions to be reasonable in the
circumstances. However, forward-looking information is subject to
business and economic risks and uncertainties and other factors
that could cause actual results of operations to differ materially
from those expressed or implied in the forward-looking information.
Such risks include, without limitation: the ability of the Company
to comply with applicable government regulations in a highly
regulated industry; the ability of the Company to successfully
integrate the Israel Transactions into its existing operations;
unexpected changes in governmental policies and regulations
affecting the production, distribution, manufacture, import, export
or use of medical and/or recreational cannabis, as applicable, in
Israel, Germany and Canada; any change in the political
environment which would negatively affect the decriminalization
and/or legalization of recreational cannabis in Israel and Germany; conflict in Eastern Europe; and unexpected disruptions to
the operations and businesses of the Company as a result of the
ongoing COVID-19 global pandemic or other disease outbreaks.
Please see the other risks, uncertainties and factors set out
under the heading "Risk Factors" in the Company's management's
discussion and analysis dated November 15,
2021 and annual information form dated April 26, 2021 filed with Canadian securities
regulators and which are available on the Company's issuer profile
on SEDAR at www.sedar.com. Any forward-looking statement included
in this press release is made as of the date of this press release
and is based on the beliefs, estimates, expectations and opinions
of management on the date such forward-looking information is made.
The Company does not undertake any obligation to update
forward-looking statements except as required by applicable
securities laws. Investors should not place undue reliance on
forward-looking statements. Forward-looking statements contained in
this press release are expressly qualified by this cautionary
statement.
Company Contact:
Maya
Lustig, Director Investor & Public Relations
IM Cannabis
+972-54-677-8100
maya.l@imcannabis.com
Investor Relations:
Brooks
Hamilton, Director
MZ Group – MZ North America
+1 949-546-6326
IMCC@mzgroup.us
[1] All NIS to CAD conversions are based on the Bank of
Israel exchange rate on
March 11, 2022 of NIS 2.554 = C$1.
[2] All USD to CAD conversions are based on the Bank of
Canada exchange rate on
March 11, 2022 of US$1 = C$1.272.
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SOURCE IM Cannabis Corp.