Closure of Sde Avraham farm in Israel optimizes Company's organizational
structure by fully leveraging global import-export supply
chain
Increase in Revolving Credit Facility availability to
$15 million supports increased global
demand for premium cannabis
TORONTO,
Canada and GLIL YAM, Israel , April 6,
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, today announced new strategic
imperatives designed to enhance organizational efficiency and
reduce operating costs while further responding to the increased
demand for premium, indoor-grown Canadian cannabis from Israeli
consumers. As part of these changes, Focus Medical Herbs Ltd.
("Focus Medical") has decided to close the Sde Avraham cultivation
farm in Israel that it owns and
operates. Focus Medical has an exclusive commercial agreement with
IM Cannabis to distribute its production under the IMC brand. Focus
Medical will complete the closure of the Sde Avraham cultivation
farm during the second quarter of 2022.
The closure of Sde Avraham farm will allow the Company to better
leverage its fully licensed import-export supply chain and focus on
importing premium and ultra-premium products from its subsidiaries
in Canada and other leading
Canadian suppliers. IM Cannabis will continue to support the
cultivation sector in Israel by
concentrating on purchasing from third-party cultivation facilities
in Israel that have advanced
technological greenhouses and will rely on existing inventory of
proprietary genetics.
The Company also completed an amendment to increase the
availability under the existing revolving credit facility with a
private Canadian creditor that is maintained by Trichome JWC
Acquisition Corp. ("TJAC") to $15
million (the "Revolving Credit Facility") to better support
the working capital needs associated with its global supply chain
and the growing demand for its premium Canadian-grown cannabis.
Amounts drawn under the Revolving Credit Facility are margined
against eligible accounts receivable and inventory and are secured
against the assets of the Company's Canadian subsidiaries. The term
of the Revolving Credit Facility was extended to May 2023. For more information on the Revolving
Credit Facility, please see the Company's annual information form
dated March 31, 2022, available on
the Company's SEDAR profile at www.sedar.com.
"IM Cannabis is well positioned to meet the elevated demand for
premium cannabis through our global supply chain and cultivation
facilities in Canada," said
Oren Shuster, Chief Executive
Officer of IM Cannabis. "Over the last decade, Focus Medical
has been the main cultivator of our products sold in the Israeli
market and we are grateful for the team's hard work and dedication.
Our ability to import from our Canadian facilities provides us with
a high-quality and reliable source of supply for the Israeli and
German medical markets as they continue to evolve. We believe this
strategic transition will strengthen our operating model and
ultimately support sustainable, long-term growth for our
stakeholders."
In 2021, the Company established a strong presence in
Canada through acquiring two
indoor cultivation facilities of TJAC and MYM Nutraceuticals Inc.
("MYM"), which grow premium and ultra-premium products and have
leading brands in the adult-use recreational Canadian market,
WAGNERS and Highland Grow. The TJAC and MYM acquisitions enable the
Company to seamlessly import these products into Israel and provide Israeli patients with
premium products, some of which are already sold in pharmacies in
Israel. In the first quarter of
2022, the Company launched its WAGNERS brand in Israel.
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 Company operates medical cannabis retail pharmacies, online
platforms, distribution centres and logistical hubs through IMC
Holdings Ltd. 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, 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.
About Focus Medical
Focus Medical is one of eight original licensed producers of
medical cannabis in Israel and has
over 10 years of experience growing high quality medical cannabis
in the Israeli market. According to accounting criteria in IFRS 10,
the Company is viewed as effectively exercising control over Focus,
and therefore, the accounts of Focus are consolidated with those of
the Company. Focus Medical has an exclusive commercial agreement
with IM Cannabis to distribute its production under the IMC brand.
In addition to its own capacity, Focus Medical has supply
agreements with other cultivators for additional supply using its
proprietary genetics and for sale under the IMC brand.
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 regarding the Company's import-export supply chain and
ability to import a sufficient amount of premium products from its
Canadian subsidiaries and other leading Canadian suppliers, the
Company's ability to meet elevated demand for premium cannabis, the
ability to import cannabis from the Company's Canadian facilities,
the sustainability of growth as a result of the Company's
transition to an asset-light model, the savings in operating costs
as a result of closing the Sde Avraham facility, the use of the
Revolving Credit Facility to support working capital needs
associated with the Company's global supply chain and the growing
demand for its premium Canadian-grown cannabis, and the Company's
business and strategic plans.
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 Company's reliance on third-party supply
agreements; 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 annual
information form dated March 31,
2022, which is 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
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SOURCE IM Cannabis Corp.