According to industry analysts, the global market for licensed
medical cannabis is growing at a compound annual rate of more than
21.1%, and is on track to exceed $63.5 billion by 2024
The market is being driven by the increasing awareness of
cannabis for various medical applications, like chronic and
neuropathic pain, epilepsy, glaucoma, cancer treatment, and opioid
addiction. An increasing number of countries as well as many U.S.
states are legalizing the use of medical cannabis, which is
supporting broader therapeutic studies and medical use. Many new
cannabis studies and clinical trials are underway at major
hospitals and universities, including the first-ever U.S.
DEA-approved clinical study for the treatment of post-traumatic
stress disorder that was launched early last year in Colorado.
FinCanna is looking to support the greater medical use of
cannabis and benefit from the growth in the market by investing in
top-tier licensed medical cannabis companies in California. The
company is offering access to capital in exchange for royalties
from their licensed medical cannabis and related operations.
FinCanna’s flagship investment is Cultivation Technologies
(CTI), based in Irvine, California. CTI is developing two very
significant, state-of-the-art medical cannabis projects in
California and may expand in the future.
“We aim to capitalize on the fast-emerging licensed medical
cannabis opportunity in California through building a portfolio of
investments in scalable, best-in-class projects like CTI,” said
Andriyko Herchak, president and CEO of FinCanna, which has an
agreement to go public via a previously announced reverse takeover
with Astar Minerals Ltd. (TSX.V:TAR). “We believe our royalty-based
business model is ideally suited to the market opportunity and will
resonate with investors.”
California - Land of OpportunityFinCanna is
focusing initially on California since it is the sixth largest
economy in the world and the largest medical cannabis market in
North America. Analysts estimate the State’s legal cannabis
industry will grow at a 21.1% CAGR to $6.5 billion by 2020, and
generate upwards of $1 billion in tax revenue.
After becoming the first state to legalize medical cannabis in
1996, California has developed into a relatively sophisticated
patient marketplace. The state legislature passed in 2016 the
Medical Cannabis Regulation and Safety Act and the Adult Use of
Marijuana Act, and has continued to take additional regulatory
actions to support the market. New laws that come into effect in
January 2018 are expected to significantly change existing supply
and demand dynamics.
In addition to the high capital costs for building and
maintaining compliant indoor facilities, companies will be required
to obtain local approvals in a process that can take a year or
more, as well as meet rigorous pesticide and testing standards.
These constraints could keep State licensed supply levels low over
the coming years.
First Mover AdvantageIn terms of meeting the
new California regulations, CTI is ahead of the curve. The company
has already secured permits to construct a fully-entitled, 111,500
sf. permitted medical cannabis facility on a six-acre property in
Coachella, Southern California.
Plans for the campus include large-scale cultivation, extraction
and manufacturing capabilities, as well as support for testing,
distribution and processing. An indoor multi-tier grow system will
produce ultra-premium, chemical-pesticide-free products with
high-yield. An extraction facility will enable branded and
white-label production in a programmable, repeatable and scalable
system.
FinCanna and CTI recently announced an interim medical cannabis
extraction lab has been established on the Coachella premises in
accordance with CTI’s conditional use permit. The lab has already
begun to produce medical extracts for sale, and will remain in
operation during the construction of the full six-acre medical
cannabis campus planned for the site.
While the lab is among the first medical cannabis solvent
extraction facilities to be legally permitted in California, CTI
believes it to be the first such facility to conform to AB 2679, a
key CTI-sponsored legislation passed in 2016 allowing
locally-permitted extraction labs to operate legally. The new
comprehensive rules coming into effect on January 1, 2018 are
expected to create significant barriers to entry for existing and
new medical cannabis producers who, unlike CTI, have not secured
municipal permitting or are unable to cultivate without chemical
pesticides.
FinCanna is investing in CTI in return for royalty payments
equal to 10% of CTI’s top line revenues at Coachella. FinCanna also
has the right to invest and earn the same royalty on CTI’s next two
licensed medical cannabis facility projects. The second project has
already been identified in Colusa, Northern California on a
10.9-acre property, which also features local approvals for
extraction and cultivation.
About Cultivation TechnologiesCultivation
Technologies, Inc. provides infrastructure, genetics, technology,
and branding to the legal medical cannabis industry. The first
major project for the company is in Coachella, California, which
will span 6-acres featuring cultivation centers, manufacturing
facilities, a testing lab, a distribution hub, and a centralized
processing center. For more information,
visit www.CultivationTech.com.
About FinCanna Capital Corp.FinCanna is a
royalty company for licensed medical cannabis, with a focus on
California. FinCanna, led by a team of finance and industry
experts, is building its portfolio of investments in scalable,
best-in-class projects. FinCanna’s flagship investment is with
Cultivation Technologies, Inc. (CTI) to provide funding for its
fully-entitled, large-scale indoor medical cannabis facility to be
developed in Coachella, Southern California. This Coachella Campus
will be a state-of-the-art facility that will include cultivation,
extraction, manufacturing, testing and distribution. For additional
information, visit www.fincannacapital.com.
FinCanna and Astar entered into a binding agreement on July 13,
2017, pursuant to which Astar will acquire all of the issued and
outstanding common shares of FinCanna on a one for one basis (the
“Transaction”).
All trademarks in this press release are the
exclusive property of their respective owners.
FinCanna Capital Corp. Andriyko Herchak,
CEO & Directoraherchak@fincannacapital.com
Astar Minerals Ltd. Stephen Stanley, CEO
& Director
Investor Relations: Caleb Jeffries Kin
Communications 1-866-684-6730 CALI@kincommunications.com
Neither the TSX Venture Exchange or the CSE in any
way passed upon the merits of the Transaction and has neither
approved nor disapproved the contents of this news release.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy any securities.
All information contained in this news release with respect to
Astar and FinCanna was supplied by the parties, respectively, for
inclusion herein, and each parties' directors and officers have
relied on the other party for any information concerning such
party.
Forward-Looking InformationThis news release
contains forward-looking information based on current expectations.
Statements about, among other things, the future business plans and
prospects of FinCanna and CTI are forward looking information.
These statements should not be read as guarantees of future
performance or results. Such statements involve known and unknown
risks, uncertainties and other factors that may cause actual
results, performance or achievements to be materially different
from those implied by such statements. Such factors include, but
are not limited to the ability of CTI to execute on its current
business plan, the ability of FinCanna to identify and finance
investment opportunities, and changes in the U.S. and Canadian
regulatory regime. Although such statements are based on
management's reasonable assumptions at the date such statements are
made, there can be no assurance that FinCanna or CTI will achieve
the future performance or results described above and that such
forward-looking information will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such forward-looking information. Accordingly,
readers should not place undue reliance on the forward-looking
information. Astar and FinCanna assume no responsibility to update
or revise forward-looking information to reflect new events or
circumstances unless required by applicable law.