SOL Global to Focus Resources and Investments on Growing Florida Market And Its Purchase of California Premium Cultivator Northern Emeralds
MCP Wellness To Repay All $12.5 Million Advanced By SOL Global and CannCure
TORONTO, Nov. 27, 2019 /PRNewswire/ - SOL Global Investments Corp.'s ("SOL Global" or "Company") (CSE: SOL) (OTCPK: SOLCF) (Frankfurt: 9SB) portfolio company CannCure Investments Inc. ("CannCure"), owner/operator of the licensed Florida medical marijuana treatment center One Plant (previously named as 3 Boys Farms) and proposed purchaser of the famed California craft cannabis cultivator ECD Holdings, Inc., d/b/a Northern Emeralds ("Northern Emeralds"), today announced it has entered into a mutual termination agreement and promissory note with MCP Wellness to terminate the binding letter of intent (the "Binding LOI") dated April 23, 2019 whereby the Company was to acquire 100% of the stock of MCP Wellness ("MCP") for $35 million in cash and US$115 million in equity consideration in CannCure.
MCP is the Merida Capital Partners affiliate that owns the rights to own three Michigan cultivation licenses, a processing license, 9 licensed and operating provisioning centers ("dispensaries"), and 6 additional dispensary licenses, giving it the largest retail footprint in the state of Michigan.
Both MCP and the Company have recognized that current market conditions do not support a transaction of this size, and both parties and their respective shareholders are better served focusing capital and resources on building out their respective businesses. SOL Global will remain focused on the scale up of its rapidly expanding Florida operations via One Plant Florida, and MCP will focus on opening additional dispensaries and launching a cultivation facility in Michigan.
Together, SOL Global and MCP have determined that though they are terminating their LOI to merge due to ongoing market conditions, they will continue to work together towards finalizing a strategic licensing agreement whereby MCP Wellness would engage Northern Emeralds to provide cultivation and processing standard operating procedures to MCP for a to be agreed upon royalty (subject to the receipt of all regulatory approvals). As MCP Wellness builds its cultivation footprint to go with its nine operating Dispensaries, a strategic agreement with Northern Emeralds to introduce the highest quality flower possible will be instrumental in establishing it as one of the largest vertically integrated operations in Michigan.
As part of the amicable termination, the $12.5 million advanced by SOL Global and its wholly owned subsidiary CannCure to MCP Wellness will be repaid in full over the next twelve (12) months in monthly installments and 2 balloon payments at the 6 and 12 month time frames. While the promissory note is outstanding, CannCure will have the option to acquire certain assets from MCP Wellness, convert any amounts due into stock in the Michigan operator, or complete the originally contemplated transaction on substantially similar terms. Any transactions contemplated herein are subject to regulatory approval.
The Company wishes to announce that the board of directors have resolved to change the Company's fiscal year-end from March 31st to November 30th, effective immediately. By moving the Company's reporting cycle to a non-calendar quarter basis, the Company aims to reduce the time constraints and administrative expenses associated with having the same calendar quarterly reporting cycle as most other reporting issuers and to align its financial year-end with other related corporations. The notice for the year-end change required under National Instrument 51-102 has been filed under the Company's profile on www.sedar.com.
As a result, the Company will report audited financial results for an eight-month transitional fiscal year from April 1, 2019 to November 30, 2019 with a comparative of twelve-month audited financial statements from April 1, 2018 to March 31, 2019. Afterwards, the Company will revert to a customary quarterly reporting calendar based on a November 30th year-end, with fiscal quarters ending on the last day in February, May, August and November each year. The change in the Company's financial year end is subject to approval by the Canada Revenue Agency.
About SOL Global Investments Corp.
SOL Global is an international investment company with a focus on, but not limited to, cannabis and cannabis related companies in legal U.S. states, the hemp and CBD marketplaces and the emerging European cannabis and hemp marketplaces. Its strategic investments and partnerships across cultivation, distribution and retail complement the company's R&D program with the University of Miami. It is this comprehensive approach that is positioning SOL Global as a future frontrunner in the United States' medical cannabis industry.
Advisory on Forward-Looking Information
This press release contains "forward-looking information" within the meaning of applicable securities laws. All statements contained herein that are not clearly historical in nature may constitute forward-looking information. In some cases, forward-looking information can be identified by words or phrases such as "may", "will", "expect", "likely", "should", "would", "plan", "anticipate", "intend", "potential", "proposed", "estimate", "believe" or the negative of these terms, or other similar words, expressions and grammatical variations thereof, or statements that certain events or conditions "may" or "will" happen, or by discussions of strategy. The forward-looking information contained herein include, but are not limited to, information relating to the Company's strategic plans and business.
By nature, forward-looking information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. A variety of factors, including known and unknown risks, many of which are beyond our control, could cause actual results to differ materially from the forward-looking information in this press release. Such factors include, but are not limited to: the Company's ability to comply with all applicable governmental regulations in a highly regulated business; investing in target companies or projects which have limited or no operating history and are engaged in activities currently considered illegal under US federal laws; changes in laws; limited operating history; reliance on management; requirements for additional financing; competition; inconsistent public opinion and perception regarding the medical-use and adult-use marijuana industry; and regulatory or political change. Additional risk factors can also be found in the Company's current MD&A, which has been filed on SEDAR and can be accessed at www.sedar.com.
Readers are cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking information. The forward-looking information contained herein is made as of the date of this press release and is based on the beliefs, estimates, expectations and opinions of management on the date such forward-looking information is made. The Company undertakes no obligation to update or revise any forward-looking information, whether as a result of new information, estimates or opinions, future events or results or otherwise or to explain any material difference between subsequent actual events and such forward-looking information, except as required by applicable law.
SOURCE SOL Global Investments Corp.