VANCOUVER, Dec. 30, 2019 /PRNewswire/ - AgriCann Solutions Corp. (the "Company", "AgriCann" or "ASC") is pleased to announce entering into a binding Letter of Intent ("LOI") with CannaHoldCo, Inc. ("CHC") outlining the general terms and conditions of a proposed transaction whereby AgriCann acquires the exclusive, perpetual, royalty-free licence to use, advertise, market, sell, and distribute, on a worldwide basis (specifically excluding the United States of America), a proprietary FDA (GRAS) approved organic rapid dehydration biotechnology for genus cannabis (hemp & marijuana) (the "Product").
The Product is proven in agricultural applications for dehydrating large volume produce crops and has undergone various independent verifications by U.S.-registered laboratories regarding the efficacy of the unique formulation used for cannabis and hemp. AgriCann recently completed its own independent verification testing at a Health Canada-licenced laboratory.
Key Benefits of the Product
- Reduces hanging dry-time to approximately 24 hours;
- Retains cannabinoid and terpene profile;
- Prevents mold, mildew, and pest cross-contamination;
- Provides a shelf-life of 2+ years without degradation.
The Product is applied as a spray or via submersion of freshly harvested biomass. When mixed with water, the powder creates a semi-permeable membrane around the biomass. During the dehydration process, this semi-permeability allows H2O moisture molecules to escape, while retaining the cannabinoids and terpenes. The result is a significantly shorter drying time than experienced with conventional methods, along with greater retention of the desired active ingredients, thereby increasing value for the producer and lowering the operating costs associated with traditional and mechanical dryers. The Product also provides a protective barrier against mold and mildew during drying/curing and significantly increases shelf-life.
Rodney Thompson, CEO of CannaHoldCo commented, "We are very excited about this collaboration and the opportunity it provides to gain a strategic foothold into the Canadian market, which we see as a platform for global distribution – effectively a window to the world for Canada's most trusted cannabis brands. As AgriCann's largest shareholder we are well-positioned to leverage the economic benefits of this biotechnology and our service model to create significant competitive advantage, especially for Canada's top craft cannabis growers - reluctant to tender their exceptional product to oil extraction methods."
Rob van Santen, AgriCann's CEO stated: "This is next generation cannabis drying and preservation technology – ideal support for exporting top-tier product to overseas markets, as well as complementing domestic connoisseur demand with new economies of scale. By lowering operating expenses associated with drying by up to 80%, dramatically reducing the carbon footprint, and mitigating product loss due to spoilage by 30% or more, cultivator and distributor margins are significantly enhanced. Most significantly for market participants, they are provided a long shelf life along with an intact cannabinoid and terpene profile."
Highlights of the Proposed Transaction
- CHC grants ASC a perpetual, exclusive, royalty-free, fully paid-up licence to use, advertise, market, sell, and distribute the Product, a proprietary organic processing aid composed of FDA Generally Recognized as Safe (GRAS) approved organic ingredients, that reduces the drying and curing process of cannabis (collectively, the "Licence");
- The Licence is on a worldwide basis specifically excluding the United States of America which CHC retains. CHC will provide ASC with (and permit ASC to use) all technical data, know-how and trade secrets relating to the Product as held by CHC;
- As consideration for the Licence, and as incentive to CHC to build value in the Product, ASC will issue to CHC a total of 23,152,718 common shares of ASC, subject to certain escrow, earnout and pooling conditions;
- As a precondition to the closing, ASC proposes to raise CAD$2.4 million in Q1 2020 through the issue of 4.8 million common shares through a CAD$0.50 per Unit private placement, with each Unit consisting of one share and one-half of one Warrant. Each whole Warrant will entitle the holder to purchase one share at a price of CAD$0.75 for a period of 24 months following the Closing Date. The Warrants will be subject to an accelerated expiry should the shares trade at an average price greater than CAD$1.125 for ten (10) consecutive trading days on a stock exchange;
- ASC will provide a total of US$1.0 million in cash payments (the "Post Closing Payments") to CHC pursuant to a monthly payment schedule calling for twelve (12) equal payments and in accordance with a joint use of proceeds budget to be agreed between the parties. The purpose of the Post Closing Payments is for: (i) CHC's overhead expenditures, including, but not limited to, salaries (ii) for CHC to purchase equipment and develop further systems for the application of the Product in order to enter into Product contracts, for the mutual and equal benefit of ASC and CHC. The Post Closing Payments will constitute revenue to CHC.
- Closing is anticipated to occur on or prior to March 31, 2020. There are no finder's fees payable in connection with this transaction, which is arms length and subject to the customary conditions set out in a typical agreement for a proposed transaction of this type.
About AgriCann Solutions Corp.
The Company is a "Reporting Issuer" that originated as one of three spinouts upon completion of a statutory plan of arrangement completed by The Valens Company (VLNS-TSXV) (formerly Valens GroWorks Corp.) on March 12, 2015. The Company seeks to acquire a suitable business opportunity with potential for scalable near-term cash flow and sustainable growth to create shareholder value.
About CannaHoldCo, Inc.
CHC is a privately held company incorporated under the laws of the state of Wyoming, USA and is engaged in the business of worldwide marketing and distribution of Product to the cannabis industry worldwide in countries that legally permit the sale of cannabis and in the United States under applicable state law.
ON BEHALF OF AGRICANN SOLUTIONS CORP.
(signed) "Rob van Santen"
CEO & Director
Some of the statements contained in this press release are forward-looking statements and information within the meaning of applicable securities laws. Forward-looking statements and information can be identified by the use of words such as "expects", "intends", "is expected", "potential", "suggests" or variations of such words or phrases, or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements and information are not historical facts and are subject to a number of risks and uncertainties beyond the Company's control. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this news release. Accordingly, readers should not place undue reliance on forward-looking statements. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements, except as may be required by law. The Company will provide further updates respecting these initiatives as developments occur. There can be no assurance that interests in any or all of these or additional projects being pursued will be acquired, funded and/or commercialized.
AgriCann Solutions Corp.
400-1771 Robson Street, Vancouver, BC, Canada V6G 1C9
Tel. +1.604.608.1999 ~ Fax. +1.778.379.9990
SOURCE Agricann Solutions Corp.