Westleaf and Xabis finalize agreement for exclusive Canadian engagement
CALGARY, June 4, 2019 /PRNewswire/ - Westleaf Inc. (the "Company" or "Westleaf") (WL.V) (WSLFF), is pleased to announce that its subsidiary, Westleaf Labs LP, has entered into a definitive agreement with a subsidiary of Xabis Inc. ("Xabis"), whereunder Xabis will provide technical expertise to the Company's Calgary-based extraction, processing and manufacturing facility ("The Plant"), which is on schedule to complete construction this month. The agreement will provide Westleaf with exclusive access to Xabis's extraction, processing, manufacturing and product development expertise in the Canadian market.
"This partnership is another part of the execution on Westleaf's strategy of becoming a significant vertically integrated player in the Canadian cannabis industry," said Scott Hurd, President and CEO of Westleaf. "We believe a diversified offering of derivative cannabis products will account for a major shift in consumer demand once legal. We are positioning to formulate unique, high quality cannabis derivative products and have partnered with an industry leader to complement our expertise in building and running these types of facilities. We are also excited to start offering contract manufacturing services to third parties."
- Tapping into Industry Leading Expertise – Xabis is an industry leader in design, construction and management of cannabis extraction and manufacturing facilities, as well as product development. Xabis has worked in nine US states and has developed more than 200 cannabis derivative product SKUs.
- Focus on Derivative Products – Once fully complete, the Plant will be capable of producing the full suite of new derivative product lines in preparation of Health Canada's legalization of derivative and consumable products (cannabis oils, gel capsules, vape cartridges, edibles, topicals and other products) expected to occur later this year.
- Scalability – The Plant is an approximately 60,000 square foot complex with Phase I (~15,000 sq. ft.) to include R&D, processing, extraction, manufacturing and order fulfillment. Phase I construction is on schedule for completion this month. The Plant has an additional 45,000 square feet available for expansion.
- Multiple Revenue Streams – The Plant is designed to produce a diversified offering of cannabis derivative products under Westleaf's brand portfolio. Additionally, Westleaf plans to offer white labeling services to produce finished products for third parties and contract manufacturing services for raw extract and distillation.
- Developing Products for the Global Market – The Plant is being built to EU GMP specifications to ensure compliance for export capabilities. Strategically located in Calgary, the facility is not only in the largest retail market in the prairies, but also has easy access to transportation services to the rest of Canada and to global markets.
Xabis is a Colorado-based cannabis processing company which provides turnkey operations for companies in the mid-stream of the cannabis industry. With more than 75 years of collective experience, Xabis's team of PhDs and scientists manage the most technically difficult processes in the cannabis life-cycle, all aspects of the extraction and manufacturing of cannabis infused products.
"We are entirely focused on the plant-to-product portion of the value chain," explains Dale Zink, CEO of Xabis. "From the end of the grow to the final processed product shipping out to the retail store or dispensary, we apply our expertise to help companies create profitable processes and systems." Zink leads a group of PhDs with extensive experience in biotechnology and chemical engineering, including experience in the extraction industry, the pharmaceutical industry and academia.
The move by Xabis into the Canadian market under an exclusive relationship with Westleaf is the company's first foray into the largest single federally legalized recreational market. Xabis has designed, built, and operated facilities in nine U.S. states where medical or recreational cannabis has been legalized.
As partial consideration for services provided to Westleaf, Xabis will be entitled to earn equity-based compensation of up to $1,000,000 worth of common shares of Westleaf ("Common Shares"), payable in three tranches over a three year period. The pricing of the Westleaf common shares to be issued under each tranche will be determined by dividing the equivalent dollar amount of the Common Shares to be received by Xabis under the applicable tranche by the five day volume weighted average trading price of the Common Shares determined on the trading day immediately preceding the date on which the Common Shares are to be issued.
New Investor Presentation
Westleaf is also pleased to announce that it has posted a new investor presentation on its website. The investor presentation can be found at https://www.westleaf.com/financials-presentations/
Xabis brings scientific discipline, sound business principles, and professionalism to the cannabis industry by delivering turnkey processing operations for the commercial scale transformation of cannabis from plant to product. Xabis is led by seasoned business professionals and scientific experts, including some of the industry's leading chemical and biological PhDs and engineers. For more information, please visit www.Xabisinc.com
About Westleaf Inc.
Westleaf is a vertically integrated cannabis company focused on innovative retail experiences and engaging cannabis brands as well as cultivation, production and extraction of cannabis products. Westleaf is rolling out a national retail footprint for its retail concept Prairie Records, with stores planned for British Columbia, Alberta, Saskatchewan and potentially Manitoba and Ontario. The retail concept leverages the instinctual tie between recreational cannabis and music and redefines the cannabis purchasing experience. The Company also has two significant production facilities under construction and scheduled for completion in 2019. For more information, please visit www.westleaf.com or www.prairierecords.ca.
Neither TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release
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 to, among other things, (i) the location of retail cannabis stores that Westleaf plans to open; (ii) the construction of Westleaf's production facilities and the timing for completion of same; (iii) products to be produced from Westleaf's production facilities and the products and services that Westleaf plans to offer; (iv) timing of provincial and federal regulatory approvals; (v) timing of legalization of certain derivative cannabis products; and (vi) the issuance of Common Shares to Xabis as consideration for services provided to Wesleaf by Xabis and the timing thereof. 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: risks relating to the ability to obtain or maintain licences to retail cannabis products; review of Westleaf's production facilities by Health Canada and receipt of licences from Health Canada in respect thereof; future legislative and regulatory developments involving cannabis, including the passing of regulations regarding derivative cannabis products; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the labour market generally and the ability to access, hire and retain employees; general business, economic, competitive, political and social uncertainties; the satisfaction of conditions precedent under Westleaf's credit facilities; timing and completion of construction of Westleaf's production facilities and retail locations; and the delay or failure to receive board, ATB Financial or regulatory approvals, including any approvals of the TSX Venture Exchange, as applicable. 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. Except as required by law, Westleaf assume no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.