CALGARY, July 24, 2019 /CNW/ - Westleaf Inc. (the
"Company" or "Westleaf") (TSX-V:WL) (OTCQB:WSLFF), is
pleased to announce that its subsidiary, Westleaf Labs LP, has
entered into a white labeling agreement with Delta 9 (TSXV:
NINE)(OTCQX: VRNDF) to supply approximately $4 million of cannabis derivative products from
its large-scale extraction and manufacturing facility located in
Calgary, known as The
Plant. Under the terms of the agreement, the contract will
begin on October 1, subject to
receipt of final license approval from Health Canada, and will
carry an initial term of one year, whereby Delta 9 will be required
to purchase a minimum of ~$4 million
of various white labelled derivative products (such products are
expected to include a mix of vape pens, gel caps, tincture oil, and
edibles) with an option to increase such amount up to $16 million per year.
"This is an important milestone for The Plant and for
Westleaf in securing contractual revenue," noted Scott Hurd, President and CEO, Westleaf Inc.
"This is the first of what we believe will be many derivative
product sales and manufacturing agreements for our facility, Phase
I of which is designed to process up to 65,000 kilograms of dried
cannabis flower per year." Hurd added that The
Plant has an additional 45,000 square feet of
space available for expansion which has the
potential to increase its processing capacity in
excess of 1,000,000 kilograms per year. Additionally, the expansion
will greatly increase its capacity to formulate and produce the
next wave of cannabis derivative products such as vapes, edibles
and topicals, once they are legalized later this year.
"When looking at our suite of options for white-labeled
derivative cannabis products, Westleaf stood out as the clear
choice." said John Arbuthnot,
President and CEO of Delta 9. "Given Westleaf's large menu of
existing product formulations and distribution capabilities through
their cannabis retail chain, Prairie Records, we view this
agreement as positive step in expanding our Delta 9 branded product
offerings and distribution footprint."
Highlights
- Contractual Revenue – Approximately $4 million of committed revenue stream (depending
on mix of derivative products selected) expected to be received by
Westleaf over the 12-month term with an option for Delta 9 to
increase that amount up to $16
million per year and extend for an additional year on the
same terms and conditions;
- Retail Distribution – Given Westleaf's wholly-owned
distribution channels, the Delta 9 branded white-label products are
anticipated to be sold through Westleaf's chain of cannabis retail
stores, Prairie Records, in addition to Delta 9's retail in
Manitoba and provincial cannabis
regulatory bodies across Canada;
- Leveraging Existing U.S. Product Formulations – The
facility was designed by U.S. cannabis extraction industry
leaders, XABIS, and Westleaf will leverage their existing
product formulation expertise, which includes over 24 different
form factors developed and over 200 individual product SKUs
produced, all of which remain exclusive to Westleaf within
Canada;
- Multiple Revenue Streams – Westleaf plans to secure
additional white-labelling and contract manufacturing agreements
with other third parties in addition to producing their own suite
of branded derivative products, Loon, Backstage, and
General Admission.
About Westleaf Inc.
Westleaf is a Canadian cannabis company focused on cannabis
brands, extraction and production of derivatives, wholly owned
retail, as well as cannabis cultivation . The Company's extraction
and processing facility, The Plant, will produce high
quality and consistent cannabis derivatives and consumables, both
for Westleaf's in-house brands as well as white label products.
Westleaf's retail concept, Prairie Records, leverages the
instinctual tie between recreational cannabis and music with stores
operating or in development across Western Canada. The
Company's Thunderchild cultivation facility is scheduled for
completion at the end of this year.
Neither 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 release
Cautionary Statements
This news release contains "forward-looking information" and
"forward-looking statements" (collectively, "forward-looking
statements") within the meaning of the applicable Canadian
securities legislation. All statements, other than statements of
historical fact, are forward-looking statements and are based on
expectations, estimates and projections as at the date of this news
release. Any statement that involves discussions with respect to
predictions, expectations, beliefs, plans, projections, objectives,
assumptions, future events or performance (often but not always
using phrases such as "expects", or "does not expect", "is
expected", "anticipates" or "does not anticipate", "plans",
"budget", "scheduled", "forecasts", "estimates", "believes" or
"intends" or variations of such words and phrases or stating that
certain actions, events or results "may" or "could", "would",
"might" or "will" be taken to occur or be achieved) are not
statements of historical fact and may be forward-looking
statements. In this news release, forward-looking statements relate
to, among other things, (i) retail cannabis stores that Westleaf
plans to open; (ii) the construction of Westleaf's production
facilities and the timing for completion of same; (iii)
commencement of production at Westleaf's production facilities;
(iv) the Plant providing a competitive advantage by being adaptive
to consumer needs; (v) products and brands to be produced and
distributed from Westleaf's production facilities and the products
and services that Westleaf plans to distribute and offer; (iv)
timing of provincial and federal regulatory approvals, including
the Processing License; (vii) timing of legalization of certain
derivative products; (viii) changes in cannabis consumption habits
among Canadians; (ix) the processing and production capabilities of
Westleaf's extracting and cultivation facilities; * anticipated
amounts of revenue to be received under the Manufacturing
Agreement; (xi) exercise of the option to purchase further
derivative cannabis products under the Manufacturing Agreement; and
(xii) the effective date of the Manufacturing Agreement.
Forward-looking statements are necessarily based upon a number of
estimates and assumptions that, while considered reasonable, are
subject to known and unknown risks, uncertainties, and other
factors which may cause the actual results and future events to
differ materially from those expressed or implied by such
forward-looking statements. Such factors include, but are
not limited to: risks relating to the ability to obtain or maintain
licences to retail cannabis products; review of Westleaf's
production facilities by Health Canada and receipt of licences from
Health Canada in respect thereof; future legislative and regulatory
developments involving cannabis, including the passing of
regulations regarding derivative cannabis products; inability to
access sufficient capital from internal and external sources,
and/or inability to access sufficient capital on favourable terms;
the labour market generally and the ability to access, hire and
retain employees; the ability of Westleaf's production facilities
to operate and perform at peak production; general business,
economic, competitive, political and social uncertainties; the
satisfaction of conditions precedent under Westleaf's credit
facilities; timing and completion of construction of Westleaf's
production facilities and retail locations; and the delay or
failure to receive board, ATB Financial or regulatory approvals,
including any approvals of the TSX Venture Exchange, as applicable.
There can be no assurance that such statements will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on the forward-looking
statements and information contained in this news release. Except
as required by law, Westleaf assume no obligation to update the
forward-looking statements of beliefs, opinions, projections, or
other factors, should they change, except as required by
law.
View original content to download
multimedia:http://www.prnewswire.com/news-releases/westleaf-signs-one-year-4-million-white-label-cannabis-derivative-product-sale-agreement-with-an-option-to-increase-to-16-million-300890048.html
SOURCE Westleaf Inc.