Medcolcanna Organics Inc. (TSX-V: MCCN)
(“
Medcolcanna” or the “
Company”),
a Canadian medical cannabis company with operations in Colombia, is
excited to announce that it has entered into a Master Agreement
(the “
Agreement”) with Greenstein Capital Ltd.
(“
GCL”), a Maltese company. GCL’s subsidiary
(“
RefineryCo”) plans to construct and operate a
refinery (the “
Refinery”) in Germany for cannabis
oil derivatives. Pursuant to the Agreement, Medcolcanna will
acquire a 20% stake in RefineryCo.
This agreement is part of Medcolcanna’s
strategic plan to pursue opportunities for growth in the cannabis
sector. Oils and derivatives give consumers a new way to explore
and benefit from the therapeutic effects of cannabis. This
transaction allows Medcolcanna to profit from marketing a wider
array of products, while providing higher margins than traditional
dried flower.
“Oils will continue to make up a larger part of
the cannabis market, especially as regulatory changes take effect
throughout 2019 and beyond,” said Felipe de la Vega, Medcolcanna’s
CEO. “This refinery is one step forward for our international sales
strategy, which includes the possibility of processing our oils
produced in Colombia to meet the highest standards of the industry.
It also opens up an additional market for us in Germany and
throughout Europe that requires very specific, high quality
products.”
TRANSACTION OVERVIEW
GCL has agreed to grant a 20% shareholding in
RefineryCo to the Company for a purchase price of US$1 million.
Payment will be paid by the issuance by the Company of a
convertible debenture in the principal amount of US$1 million. The
convertible debenture will bear interest at 0.5% per year and
payment will be due after the Refinery is completed and is
operating to the Company’s satisfaction, and the 20% shareholding
in RefineryCo has been issued to the Company. After coming due, the
convertible debenture will be redeemable at maturity in cash or
common shares of the Company, at the option of GCL, at a conversion
price of CDN$0.285 per share. If redeemed in common shares, only
the principal, and no interest, will be payable by the Company. The
foregoing is subject to approval by the TSX Venture Exchange.
The Refinery is expected to be a turnkey project
that must be built to Medcolcanna’s standards and specifications.
The Company has to approve the commissioning of the Refinery before
the convertible debenture can be exercised.
“This announcement is also a big step forward in
our capacity to standardize pharmaceutical grade products that we
will develop and produce with our unique, advanced formulations for
several specific illnesses, such as through our recently announced
acquisition of Innovative CBD Products B.V. in the Netherlands,”
added Mr. De la Vega.
ABOUT MEDCOLCANNA
Medcolcanna is a Canadian integrated medical
cannabis company, whose main, fully-licensed operations are based
in Colombia. Led by a proven and successful management team,
Medcolcanna has facilities in prime, optimal growing locations
which strategically positions the Company to become a global leader
in the medical cannabis market.
Medcolcanna employs state of the art organic
agricultural technology and innovative pharmaceutical processes to
produce high-quality products with the goal of enhancing customer
well-being. The Company’s scalable production model ensures that
they remain at the forefront of the medical cannabis industry.
If you would like to receive News Releases via
e-mail as soon as they are published, please subscribe here:
https://medcolcanna.com/contact-us/
Additional information about Medcolcanna can be
found on its web site at www.medcolcanna.com
Neither the TSX Venture Exchange Inc. 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 and neither of these
entities has in any manner passed upon the merits of the
Transaction or any associated
transactions.
Investor Relations Contact:
Chris Reid, CFOCarrera 49b # 93-62Bogotá,
ColombiaPhone: +571 642-9113Email: info@medcolcanna.com
Camila Mendoza Quintana, Marketing
DirectorCarrera 49b # 93-62Bogotá, ColombiaPhone: +571
642-9113Email: info@medcolcanna.com
Forward-Looking 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, among other things, to the terms and conditions
of the purchase of RefineryCo and anticipated regulatory approval
thereof; as well as the receipt of all regulatory licenses required
for the cultivation, production, domestic distribution and
international export of cannabis and cannabis-related products; and
the business and operations of Medcolcanna after the consummation
of the purchase of RefineryCo. 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 general business, economic,
competitive, political and social uncertainties; and the delay or
failure to receive board, shareholder or regulatory approvals.
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.
Medcolcanna assumes no obligation to update the
forward-looking statements of beliefs, opinions, projections, or
other factors, should they change, except as required by
law.
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