MONTREAL, Oct. 17, 2019 (GLOBE NEWSWIRE) — PRESS RELEASE — Relevium Technologies Inc. has announced its wholly- owned subsidiary, Biocannabix, has executed an agreement to acquire 100 percent of the shares of Weedsense Inc, a late stage applicant for a Standard Processing and Medical Sales license under the Cannabis Act, for an aggregate purchase price of $2,000,000 subject to the achievement of certain milestones.
Weedsense is a Montreal- based business that will build a wholesale and distribution facility outside of the downtown core. Weedsense will be purchasing wholesale or bulk products from other Health Canada licensed producers or processors and will be distributing cannabis and cannabis-derived products directly to medical patients.
Weedsense may also service the recreational market by acting as a distributor to Provincially sanctioned wholesalers such as the Ontario Cannabis Store (OCS) or Société Québécoise du Cannabis (SQDC). Excess capacity at the facility may be rented out once fully licensed, and Weedsense can and may act as a secured storage facility or third party logistics (3PL) partner for other market participants who seek direct access to the Quebec market who are in need compliant storage or pick/pack solutions.
Weedsense has applied for a Standard Processing and a Medical Sales license under the Cannabis Act through Health Canada and has since received a positive Status Update to build the project. The facility will be built out to EU GMP standards and will seek EU GMP certification in the near future.
Dave Shepard, CEO and co-founder of Weedsense Inc., stated: “We began the transactional process with Relevium in May for a direct investment and, through the last few months, both parties concluded that a full acquisition was the most beneficial avenue for generating shareholder value as well as executing on the buildup of the Weedsense facility.”
Sasha Asgary, COO and co-founder of Weedsense, stated: “The intended purpose of Weedsense is to solve some of the major supply chain issues that are prevalent in the cannabis market today which include getting products to the medical and recreational markets. With Cannabis 2.0 coming into effect today, the already fragmented upstream will be further complicated by a host of new suppliers of derivative products nationwide. We think that, in collaboration with Relevium, Weedsense will be in a position to offer a superior user experience to all potential customer and client verticals be it on a D2C or B2B basis or as a service provider within the industry.”
Aurelio Useche, CEO of Relevium, stated: “The acquisition of Weedsense is an important milestone for Relevium and Biocannabix as the acquisition of this late stage applicant will help us accelerate our path in distributing cannabis products within our home market in Canada. Once the Weedsense facility receives approval from Health Canada, we will be able to hold inventory and distribute any products regulated under the Cannabis Act most notable of which will be the Cannakids products. This will be the beginning of generating significant Canadian revenues under Biocannabix. We are thrilled to have executed this agreement and look forward to working with Dave and Sasha on building out the facility and building up the business.”
The aggregate purchase price payable by Relevium to Weedsense is $2,000,000, payable in four performance-based installments.
Upon the execution of the agreement, Relevium will make an initial payment of $500,000 of the purchase price by issuing and delivering an aggregate of 7,142,857 Purchaser Shares.
Subsequent to the initial payment, purchaser will pay the balance of the purchase price as follows:
- On the day of submission of the Site Video Evidence Package to Health Canada, the purchaser shall pay an additional $500,000 of the purchase price in cash or shares by issuing and delivering an aggregate of 7,142,857 purchaser shares (the “Second Deposit Amount”);
- On the date of the grant of the Cannabis License to the vendor, the purchaser shall pay an additional $500,000 of the purchase price in cash or shares by issuing and delivering an aggregate of 7,142,857 Purchaser Shares; and
- Upon the earlier of (i) the first sale of any cannabis product by the Vendor to any customer, which may include any distributor, wholesaler, retailer or other consumer of cannabis products and (ii) the first anniversary of the date of the grant of the Cannabis License to the vendor, the purchaser shall pay the final $500,000 of the purchase price in cash or shares by issuing and delivering an aggregate of 7,142,857 Purchaser Shares (at the election of the vendors).
Within 30 days following the first 12 months of operations of Weedsense commencing on the date of commercialization, the purchaser shall cause the vendor to prepare an accounting of its gross sales during such 12-month period, prepared in accordance with Canadian generally accepted accounting principles applicable to private enterprises. Within two business days after the preparation of the statement of sales, the purchaser shall deliver the statement of sales, and all related supporting and background documentation, to the vendors. If the gross sales as shown on the statement of sales is equal to or greater than $1,250,000.00, the purchaser shall pay an aggregate of $250,000 in cash.
On the date of the agreement, the purchaser shall pay to the vendor the amount of $10,000 in immediately available funds for the purposes of funding the vendor’s operating expenses. Commencing in the first month following the date of this agreement, and continuing through to and including February 2020, the purchaser shall pay to the vendor $5,000 per month for the purposes of funding the vendor’s operating expenses.
By no later than March 1, 2020, the purchaser shall pay to the vendor, the amount of $750,000 in immediately available funds for the purposes of funding the build-out of the facility, including leasehold improvements and other modifications to the facility, in order for the Vendor to seek to obtain the Cannabis License.
By no later than May 31, 2020, the vendor shall use its commercially reasonable efforts to submit a Site Video Evidence Package to Health Canada in support of the application for the Cannabis License and thereafter shall use its commercially reasonable efforts to diligently pursue the issuance of the Cannabis License from Health Canada.
The transaction contemplated in the agreement will close once the vendor shall have obtained the Cannabis License from Health Canada and all payments necessary will have been delivered by the purchaser.
The transaction is subject to regulatory approvals including TSX venture Exchange.
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