WeedMD Closes Acquisition of Starseed Holdings Inc. and $25 Million Subscription Receipt Financing

TORONTO, Dec. 23, 2019 (GLOBE NEWSWIRE) — PRESS RELEASE — WeedMD Inc., a federally-licensed producer and distributor of medical-grade cannabis, and Starseed Holdings Inc., a medically-focused, federally-licensed cannabis company, have announced the closing of the previously announced acquisition of Starseed Holdings by WeedMD.

Concurrent with the closing, WeedMD also completed the previously announced private placement of subscription receipts with the LiUNA Pension Fund of Central and Eastern Canada (LPF), for aggregate gross proceeds of $25 million. The issue price of each subscription receipt is $1.0832, and each subscription receipt shall be automatically exchangeable into one WeedMD common share upon its shareholders approving certain matters associated with the financing at a meeting scheduled for Feb. 4, 2020.

“We officially welcome the Starseed team to the WeedMD family which together will kick-off 2020 as a very compelling, vertically-integrated cannabis company that will execute across the entire value chain,” said Keith Merker, CEO of WeedMD. “Starseed’s unique medical distribution platform complements WeedMD’s high-quality cultivation and processing platform. This partnership, along with the $25 million strategic equity investment by LPF, positions WeedMD and its shareholders with a fortified balance sheet and one of the most captive medical cannabis businesses in the country as we enter the new year.”

Management Team

Following today’s closing, Starseed’s management team, which brings extensive medical, operating, and financial expertise, in addition to strong industry and client relationships, integrates into WeedMD’s senior leadership team as follows:

• Keith Merker, CEO (maintains role)
• Angelo Tsebelis, formerly President of Starseed, assumes the role of President of WeedMD
• Nichola Thompson, CFO (maintains role)
• Stephen Ng, formerly CFO of Starseed, is appointed to Chief Strategy Officer of WeedMD
• Dr. Peter Blecher, formerly Chief Medical Officer of Starseed, assumes the role of Chief Medical Officer of WeedMD

Additional information about WeedMD’s current management team can be found here.

Board Directors

In addition to the Starseed leadership appointments, WeedMD’s board of directors is now comprised of four representatives from WeedMD and three representatives from Starseed.

WeedMD has announced that seasoned industry leader George Scorsis is appointed as Executive Chair of its board of directors. For the last six months, Scorsis has served as executive advisor to the WeedMD board and leadership team and is widely recognized in the cannabis and beverage industries for building, leading and managing high-performing management teams.

WeedMD extends its gratitude to Michael Kraft who has served as Chair of its board of directors since the company’s inception. As one of WeedMD’s co-founders, Kraft has been integral to its growth and success over the years and we are pleased he has accepted the role of strategic advisor to the board which includes the existing WeedMD directors:

• Keith Merker, currently CEO of WeedMD
• Gail Paech, formerly Associate Deputy Minister, Ministry of Health, Ontario
• Michael Pesner, previously on the board of SAQ (Société des alcools du Québec),  and KPMG executive leader

WeedMD welcomes three new board directors from Starseed: 

• Angelo Tsebelis, currently President of WeedMD
• G. Edmund King, former CEO and Chairman of CIBC Wood Gundy
• Dr. Hugh Scully, previously President of both the Ontario & Canadian Medical Associations

Additional information about WeedMD’s current board of directors can be found here.

The company would also like to thank Rick Moscone and Kevin McGovern who have elected to step down following three years and one year of service, respectively.

Pursuant to the acquisition, WeedMD acquired 100% of the issued and outstanding common shares of Starseed and in exchange Starseed shareholders received a total of approximately 71.8 million common shares of WeedMD. Certain shareholders of Starseed, holding approximately 49 million common shares of WeedMD, have agreed to an 18-month lock-up and leak out agreement.