CANNAMERICA AND INVICTUS PROVIDE UPDATE ON HEMP AND CBD JOINT VENTURE
January 16 2019 - 12:26PM
InvestorsHub NewsWire
Vancouver, BC -- January 16, 2019 -- InvestorsHub NewsWire --
INVICTUS MD STRATEGIES CORP. ("Invictus" or the "Company")
(TSXV: GENE; OTCQX: IVITF; FRA:
8IS1) is pleased to provide an update
on its binding letter of intent ("LOI") to create a joint venture
with Cannamerica Brands Corp. ("CannAmerica") (CSE:
CANA) (OTCQB:
CNNXF) and CBDistribution Company Ltd. ("CBDC") (collectively
the "Joint Venture") that was previously announced on January 7,
2019 with the intention of acquiring hemp biomass for extraction
into CBD isolate using purpose-built facilities for large scale CBD
extraction.
The
Joint Venture has entered into a binding LOI with Z3 Sciences, LLC
(“Z3”) to purchase 80% of the membership interests of Z3 for
aggregate consideration, including performance incentives, of
USD$42.25 million. Z3 is expected to provide the Joint
Venture with existing extraction contracts from extracting Hemp
biomass into CBD isolate. The current wholesale cost for CBD
Isolate is in the range of USD$5,000 to USD$7,000 per kilogram. Z3
existing extraction contracts range from USD$20 to USD$30 per input
pound of hemp biomass plus USD$1 to USD$2 per finished gram of CBD
isolate. The current facility has the capacity to process up to
50,000 lbs of hemp biomass per month with a yield of approximately
2,500 kg’s of CBD isolate per
month.
The
existing management team at Z3 consists of experienced operators
that are expected to continue to operate the extraction facilities
in Colorado where Z3 currently resides. The Z3 team
includes:
- Jacob
Tupper, Co-Founder and Chairman, specializes in structuring
contracts and creating large scale CBD deals to open expansion
opportunities;
- Ben
Metzker, Co-Founder, has founded multiple companies ranging from
digital marketing, software, consulting and most recently
manufacturing and production of CBD from hemp. He has helped
companies and people to grow their personal and professional brands
resulting in over USD$100 million in increased revenue and
profits;
- Winston Cook, CEO, is an experienced C-level executive with a
demonstrated history of working in the marketing and advertising
industry with digital strategy, search engine optimization,
customer acquisition, advertising, and sales;
and
- Chris
Mansfield, COO, has over 15 years of experience in all operations
of the information technology solutions, systems integration, and
professional services
industries;
Subject to Board approval, stock exchange approval and
completion of satisfactory due diligence, the Joint Venture and Z3
intend to enter into a definitive purchase agreement on or before
March 17, 2019. Consideration for the acquisition consists
of:
- Common shares of CANA having an aggregate value of USD$3.75
million;
- Common shares of Invictus having an aggregate value of USD$3.75
million;
- USD$5
million in cash payable over a period of 240 days from the closing
date; and
- USD$1.5 million in cash for Z3 to purchase equipment and use for
working capital purposes.
The
consideration also includes performance incentives subject to Z3
achieving gross revenue targets throughout 2020 that consist
of:
- Common shares of CANA having an aggregate value of USD$1.25
million and common shares of Invictus having an aggregate value of
USD$1.25 million if Z3 achieves gross revenue of USD$10 million for
the four months ended April 30,
2020;
- Common shares of CANA having an aggregate value of USD$1.25
million and common shares of Invictus having an aggregate value of
USD$1.25 million if Z3 achieves gross revenue of USD$10 million for
the four months ended August 31,
2020;
- Common shares of CANA having an aggregate value of USD$1.25
million and common shares of Invictus having an aggregate value of
USD$1.25 million if Z3 achieves gross revenue of USD$10 million for
the four months ended December 31,
2020;
- A
total of USD$1.75 million in cash to be paid to the shareholders in
equal proportions on January 2021 and June 2021; (ii) common shares
of the Company having an aggregate value of USD$1 million; and
(iii) common shares of Invictus having an aggregate value of USD$1
million if Z3 achieves each of the above listed gross revenue
goals, totaling minimum of USD$30 million for the 12 months ended
December 31, 2020;
- USD$8.5 million in cash and USD$4.25 million in shares of CANA
and USD$4.25 million in shares of Invictus to be paid to the
shareholders in 2021 if Z3 achieves USD$80 million in the 12 months
ended December 31, 2020.
“This
acquisition represents the next step forward in our partnership
with CannAmerica and CBDC as we progress toward extracting CBD
isolate for the United States market,” said George E. Kveton,
President and CEO of
Invictus.
“From
the beginning, our goal has been to own the entire process from
supply to distribution in order to ensure only the best products
come from our facility and end up safely in the hands of consumers
and patients around the world. We’re poised to take an important
step in achieving this goal in 2019 and our new partnerships will
only fuel additional growth as we aim to educate and serve the
masses,” said Jacob Tupper, Co-founder and Chairman of Z3 Sciences.
“With this new partnership and expansion in our Colorado facility
we anticipate extracting more than 50,000 pounds (22,700 kgs) per
month.” added Ben Metzker, Co-founder of Z3
Sciences.
“The
acquisition of a top-quality extractor is expected to give our
partnership the ability to immediately generate revenue, fill
current and new orders for CBD products, and meet the growing
demand for high quality CBD products in the United States. While Z3
does have existing contracts for its CBD isolate CannAmerica plans
to eventually use Z3 produced CBD isolate in CannAmerica branding
products as well as create an entire line of CBD products,” said
Dan Anglin, CEO and Co-Founder of
CannAmerica.
For more
information, please visit www.invictus-md.com.
On Behalf of the
Board,
George E.
Kveton
Chief Executive
Officer and Director
Jessica
Martin
Vice President,
Public Relations and Regulatory
Affairs
(833)
879-4363
About
Invictus
Invictus is a
global cannabis company offering a selection of products under a
wide range of brands. Our integrated sales approach is defined by
five pillars of distribution including medical, adult-use,
international, Licensed Producer to Licensed Producer and retail
stores.
Invictus has
partnered with business leaders to convey our corporate vision,
including KISS music legend and business mogul Gene Simmons as our
Chief Evangelist Officer. To meet growing demand, Invictus is
expanding its cultivation footprint, with three cannabis production
facilities licensed under the Cannabis Act and Cannabis Regulations
in Canada. To accommodate international sales, Invictus’
wholly-owned subsidiary, Acreage Pharms Ltd. (“Acreage Pharms”),
has designed and is currently building its Phase 3 purpose-built
cultivation facility to be European Union Good Manufacturing
Practices (“EU-GMP”) compliant. The Company is targeting up to 50
percent of production to medical cannabis. To ensure consistency in
quality and supply, Invictus maintains all aspects of the growing
process through its subsidiary, Future Harvest Development Ltd.
(“Future Harvest”), a high-quality fertilizer and nutrients
manufacturer. Invictus drives sustainable long-term shareholder
value through a diversified product portfolio with over 70 Health
Canada approved strains and a multifaceted distribution strategy
including medical, adult-use, international, Licensed Producer to
Licensed Producer and retail stores. For more information visit
www.invictus-md.com.
About CannAmerica Brands
Corp.
CannAmerica Brands
is a U.S. marine veteran founded and operated portfolio of cannabis
brands with licensing agreements in the states of Colorado, Nevada
and Maryland. The Company aims to maximize the value of its brands
by employing strong brand management teams, marketing and licensing
the brands through various distribution channels, including
dispensaries, wholesalers and distributors, in the United States
and internationally. The Company’s core strategy is to enhance and
monetize the global reach of its existing brands, and to pursue
additional strategic acquisitions to grow the scope and diversity
of its brand portfolio. For more information, please visit
www.cannamericabrands.com.
Cautionary Note Regarding
Forward-Looking Statements: This release includes certain
statements and information that may constitute forward-looking
information within the meaning of applicable Canadian securities
laws or forward-looking statements within the meaning of the United
States Private Securities Litigation Reform Act of 1995. All
statements in this news release, other than statements of
historical facts, including statements regarding future estimates,
plans, objectives, timing, assumptions or expectations of future
performance, including the Company’s plan to enter into a
definitive joint venture agreement and the joint venture’s ability
to extract CBD isolate from hemp biomass are forward-looking
statements and contain forward-looking information. Generally,
forward-looking statements and information can be identified by the
use of forward-looking terminology such as "intends" or
"anticipates", or variations of such words and phrases or
statements that certain actions, events or results "may", "could",
"should", "would" or "occur". Forward-looking statements are based
on certain material assumptions and analysis made by the Company
and the opinions and estimates of management as of the date of this
press release, including that the Company’s joint venture will be
successful in extracting CBD isolate from hemp biomass and that the
Company will be successful in entering into a definitive joint
venture agreement. These forward-looking statements are subject to
known and unknown risks, uncertainties and other factors that may
cause the actual results, level of activity, performance or
achievements of the Company to be materially different from those
expressed or implied by such forward-looking statements or
forward-looking information. Important factors that may cause
actual results to vary, include, without limitation, the joint
venture will not be successful in extracting CBD isolate from hemp
biomass and/or the Company will not be successful in reaching a
definitive joint venture agreement. Although management of the
Company has attempted to identify important factors that could
cause actual results to differ materially from those contained in
forward-looking statements or forward-looking information, there
may be other factors that cause results not to be as anticipated,
estimated or intended. 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
forward-looking statements and forward-looking information. Readers
are cautioned that reliance on such information may not be
appropriate for other purposes. The Company does not undertake to
update any forward-looking statement, forward-looking information
or financial out-look that are incorporated by reference herein,
except in accordance with applicable securities
laws.
Neither the Canadian Securities Exchange nor its Regulation
Services Provider accepts responsibility for the adequacy or
accuracy of this
release.
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