Emerald Health Therapeutics Closes Emerald Health Naturals Joint Venture
January 10 2019 - 7:00AM
Emerald Health Therapeutics, Inc. (“Emerald”) (TSXV:EMH;
OTCQX:EMHTF) is pleased to announce that, further to its news
releases dated April 17, 2018 and November 19, 2018, it has closed
its 51:49 joint venture (the “Joint Venture”) with San Diego-based
Emerald Health Bioceuticals (“EHB”), called Emerald Health Naturals
(“EHN”).
Emerald has invested $5,000,000 for 51% equity
ownership of EHN. EHB has granted EHN the exclusive Canadian
distribution rights to EHB’s award-winning product line in exchange
for 49% equity ownership of EHN. EHB’s product line consists of
nutritional supplements that use non-cannabis, non-psychoactive
plant-based bioactive compounds to support the body’s
endocannabinoid system.
Market research commissioned by the Company
identified that approximately 60% of legal cannabis users also use
natural health products. This strong consumer overlap between the
two markets is expected to create a unique opportunity for Emerald
to build its health brand through EHN and begin sales of
endocannabinoid-supporting products in natural health product
channels. These channels are not authorized to sell cannabis under
the Canadian federal cannabis regulations for recreational use
which came into force on October 17, 2018. However, if these
channels are approved in the future, the Company expects to be well
positioned to introduce its cannabis-based products into these
channels.
The formation of the Joint Venture is a
“related-party transaction” as such term is defined in Multilateral
Instrument 61-101 Protection of Minority Security Holders in
Special Transactions (“MI 61-101”) as EHB is approximately 71%
owned by Emerald Health Sciences Inc., which is also the holder of
approximately 30.6% of the outstanding common shares of the
Company. The Company is relying on the exemption from the formal
valuation requirements of MI 61-101 set out in Section 5.5(b) of MI
61-101 and the exemption from the minority shareholder approval
requirements of MI 61-101 set out in Section 5.7(a) of MI 61-101 in
respect to the creation of the Joint Venture.
In connection with the formation of the Joint
Venture, EHN has also acquired the assets of GAB Innovations
(“GAB”) and has granted non-exclusive sub-distribution rights to
Avricore Pharmaceuticals Inc. (formerly VANC Pharmaceuticals Inc.)
(“Avricore”). Both GAB and Avricore have established networks and a
history of sales success in the natural health product and pharmacy
channels. Gaetano Morello, ND, the founder of GAB, has been
appointed CEO of EHN.
Emerald also announces that Chris Wagner has
resigned as a director of the Company. As previously announced, Mr.
Wagner stepped down as CEO effective November 28, 2018. Mr. Wagner
will continue to act as a consultant to Emerald and provide
assistance when needed.
About Emerald Health Therapeutics,
Inc.
Emerald Health Therapeutics, Inc. is a Canadian
licensed producer of cannabis. Its 50%-owned Pure Sunfarms joint
venture in BC is completing the conversion of its 1.1 million
square feet (25 acre) greenhouse for cannabis cultivation in the
Lower Mainland and its Agro-Biotech operation in Québec is
completing its 75,000 square feet indoor facility. Commercial
production is expanding in both facilities. In addition, Emerald
secured over 500 acres of hemp harvest in 2018 and has contracted
for approximately 1000 acres in 2019 to 2022, with the objective of
extracting low-cost cannabidiol. Emerald’s team is highly
experienced in life sciences, product development, large-scale
agri-business, and marketing, and is focused on developing
proprietary, value-added cannabis products for medical and
adult-use customers. Emerald is part of the Emerald Health group,
which represents a broad array of companies focused on developing
pharmaceutical, botanical, and nutraceutical products developed to
provide wellness and medical benefits by interacting with the human
body’s endocannabinoid system.
Please visit www.emeraldhealth.ca for more
information or contact:
Rob Hill, Chief Financial Officer(800) 757 3536
Ext. #5
Investor Relations (800) 757 3536 Ext.
#5invest@emeraldhealth.ca
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
Cautionary Note Regarding Forward-Looking
Statements: Certain statements made in this press release that are
not historical facts are forward-looking statements and are subject
to important risks, uncertainties and assumptions, both general and
specific, which give rise to the possibility that actual results or
events could differ materially from our expectations expressed in
or implied by such forward-looking statements. Such statements
include the operations of the joint venture; establishment of
brands; sale of products; regulation of the cannabis industry;
production capacity of various facilities; expansion of facilities;
increased commercial production; anticipated production costs; and
receipt of hemp deliveries.
We cannot guarantee that any forward-looking
statement will materialize, and readers are cautioned not to place
undue reliance on these forward-looking statements. These
forward-looking statements involve risks and uncertainties related
to, among other things, failure to obtain necessary financing;
results of production and sale activities; results of scientific
research; regulatory changes; changes in prices and costs of
inputs; demand for labour; demand for products; as well as the risk
factors described in the Company’s annual information form and
other regulatory filings. The forward-looking statements contained
in this press release represent our expectations as of the date
hereof. Forward-looking statements are presented for the purpose of
providing information about management's current expectations and
plans and allowing investors and others to obtain a better
understanding of our anticipated operating environment. Readers are
cautioned that such information may not be appropriate for other
purposes. The Company undertakes no obligations to update or revise
such statements to reflect new circumstances or unanticipated
events as they occur, unless required by applicable law.
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