Also provides update on Convertible
Debenture financing and announces filing
of Preliminary Base Shelf Prospectus
/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED
STATES/
VANCOUVER, March 18, 2019 /CNW/ - Zenabis Global Inc
(TSXV:ZENA) ("Zenabis" or the "Company")
is pleased to provide this update on certain operational
matters.
Construction at Zenabis Atholville is progressing on schedule.
The remaining conversion work is expected to add an additional
25,000 kg in annual production capacity, which will become
operational in stages in the second quarter of 2019. Zenabis has
submitted a license amendment for five additional flower rooms at
Zenabis Atholville. This amendment is expected to increase the
run-rate production capacity of Zenabis Atholville to 12,500 kg per
year by the end of April 2019 (at
this point in time the total run-rate production capacity of
Zenabis is expected to be 13,400 kg per year). Zenabis has
approximately $47,600,000 in capital
expenditure remaining at Zenabis Atholville.
Conversion of Zenabis Langley is split into the following
stages:
- the first 10 acres of greenhouse ("Site A"); and
- the remaining 38 acres of greenhouses ("Site B").
Construction is currently focused on Site A. To date, Zenabis
has spent $3,700,000 of the
approximately $30,000,000 budget for
Site A. Approximately 41.7% of the Site A buildout will be funded
by the BMO term loan. Zenabis expects that approximately half of
Site A will be operational by June
2019 with a run-rate production capacity of 43,050 kg per
year. Zenabis expects that Site A will be fully operational by
early in the third quarter of 2019, representing incremental
production capacity of 43,050 kg per year (the total Zenabis
Langley run-rate production capacity at this point of time is
expected to be 96,100kg). Zenabis expects that work will begin at
Site B late in the second quarter of 2019 or early in the third
quarter of 2019. Zenabis' budget for the Site B conversion is
approximately $120,000,000.
The Company also announces that it expects to close the
previously announced private placement of 15,000 unsecured
debentures on or about March 20,
2019. Eight Capital has agreed to purchase the debentures on
a "bought deal" private placement basis pursuant to applicable
securities laws exemptions, at a price of $1,000 per debenture for gross proceeds of
$15,000,000. Also as previously
announced, Eight Capital has agreed to offer for sale an additional
60,000 convertible debentures for additional gross proceeds of
$60,000,000. The additional
debentures will be issuable in tranches at the option of the
Company.
Finally, the Company announces that it has filed a preliminary
short form base shelf prospectus (the "Shelf Prospectus")
with the securities commissions in each of the provinces of
Canada, except Québec.
The Shelf Prospectus, when made final, will allow the Company to
offer up to $100,000,000 of common
shares, preferred shares, debt securities, warrants and units, or
any combination thereof, from time to time during the 25-month
period that the (final) Shelf Prospectus is effective. The Company
filed this Shelf Prospectus in order to maintain financial strength
and flexibility going forward but has not entered into any
agreements or arrangements to authorize or offer any securities
under the Shelf Prospectus at this time. The specific terms of any
future offering of securities, including the use of proceeds from
any offering, will be established in a prospectus supplement to the
Shelf Prospectus, which supplement will be filed with the
applicable securities regulatory authorities.
A copy of the Shelf Prospectus can be found under the Company's
profile on SEDAR at www.sedar.com. Copies of the Shelf
Prospectus may also be obtained by contacting the Chief
Administrative Officer of the Company at Suite 205, 1688 – 152nd
Street, Surrey, British Columbia
V4A 4N2, telephone (855) 936-2247.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in policies
of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release.
About Zenabis
Zenabis is a significant licensed cannabis cultivator of medical
and recreational cannabis, and employs staff coast-to-coast, across
facilities in Atholville, New
Brunswick; Delta and
Langley, B.C.; and Stellarton, Nova Scotia. In addition to
gaining technologically advanced knowledge of plant propagation,
the recent addition of state-of-the-art greenhouses in Langley provides Zenabis with 3.5 million
square feet of facility space that can, upon full conversion, be
dedicated to cannabis production.
If all facility space is fully built out and dedicated to
production, Zenabis will own, and have access to, 660,000 square
feet of high quality indoor cannabis production space, as well as
2.1 million square feet of greenhouse space at its Langley facility (an additional 700,000 square
feet of greenhouse space will be used to continue the existing
propagation business, to be converted at such a time that is
beneficial to the strategic position of the company), strategically
positioned on Canada's coasts.
These facilities, if fully converted for cannabis production, would
have the design capacity to yield approximately 479,300 kg of dried
cannabis annually, for both national and international market
distribution. The Zenabis brand name is used among the medical
market, while Namaste is used to service the adult-use recreational
market.
Forward Looking Information
This news release contains statements that may
constitute "forward-looking information" within the meaning of
applicable Canadian securities legislation. Forward-looking
information may include, among others, statements regarding the
future plans, costs, objectives or performance of Zenabis, or the
assumptions underlying any of the foregoing. In this news release,
words such as "may", "would", "could", "will", "likely", "believe",
"expect", "anticipate", "intend", "plan", "estimate" and similar
words and the negative form thereof are used to identify
forward-looking statements. In this news release, forward-looking
statements relate, among other things, to: completion of any
offering of securities under the Shelf Prospectus, the use of the
proceeds thereof, and the design capacity, conversion, expansion
and optimization of our facilities, and the budget for such
conversion, expansion and optimization. Forward-looking statements
should not be read as guarantees of future performance or results,
and will not necessarily be accurate indications of whether, or the
times at or by which, such future performance will be achieved. No
assurance can be given that any events anticipated by the
forward-looking information will transpire or occur.
Forward-looking information is based on information available at
the time and/or management's good-faith belief with respect to
future events and are subject to known or unknown risks,
uncertainties, assumptions and other unpredictable factors, many of
which are beyond Zenabis' control. These risks, uncertainties and
assumptions include, but are not limited to, those described
Zenabis Management Information Circular dated November 23, 2018, a copy of which is available
on SEDAR at www.sedar.com and could cause actual events or results
to differ materially from those projected in any forward-looking
statements. Furthermore, any forward-looking information with
respect to available space for cannabis production is subject to
the qualification that management of Zenabis may decide not to use
all available space for cannabis production, and the assumptions
that any construction or conversion would not be cost prohibitive,
required permits will be obtained, labour, materials and equipment
necessary to complete such construction or conversion will be
available, and funds necessary to complete such construction or
conversion will be available on terms acceptable to the Company.
Accordingly, readers should not place undue reliance on the
forward-looking statements and information contained in this news
release. Zenabis does not intend, nor undertake any obligation, to
update or revise any forward-looking information contained in this
news release to reflect subsequent information, events or
circumstances or otherwise, except if required by applicable
laws.
For more information, visit: https://www.zenabis.com.
SOURCE Zenabis Global Inc.