VANCOUVER, British Columbia, Jan. 24, 2019 (GLOBE NEWSWIRE) --
Auxly Cannabis Group Inc. (XLY.V) (CBWTF) (the
"Company") is pleased to announce that the Company
has signed a definitive agreement (the
âTransactionâ) with 2368523 Ontario Limited
(d/b/a) Curative Cannabis ("Curative"). The
Company will acquire 46% of the common shares of Curative and enter
into a long-term cannabis purchase and sale agreement to fund the
construction and development costs of Curativeâs cannabis
cultivation facility in Chatham-Kent, Ontario (the
âFacilityâ).
The Facility is designed as a purpose-built indoor facility for
the production of ultra-premium cannabis product. With an initial
footprint spanning approximately 30,000 square feet, the first
phase of the Facility is expected to yield approximately 2,900 kg
of cannabis per annum. Curative anticipates bringing a unique
ultra-premium cannabis product to Canadian recreational cannabis
consumers through its proprietary genetics database of over 90
stable, and highly sought-after, cannabis strains (the
"Genetic Library").
The first phase of the Facility, being built to EU GMP standards,
is currently under construction with an anticipated completion and
Health Canada evidence package submission date of March 2019.
Curativeâs Facility rests on a 33-acre land parcel thereby
providing ample room for Facility expansion. Curative has already
received municipal approval for the expansion of the Facility for
up to an additional 120,000 square feet of indoor cultivation
space.
Pursuant to the Transaction, the Company has entered into a share
purchase agreement with certain shareholders of Curative, whereby
the Company has agreed to purchase 46% of the common shares of
Curative from certain Curative shareholders, in exchange for the
issuance of 5,056,026 common shares of the Company (the
âConsideration Sharesâ). The Company will also
enter into a long-term cannabis purchase and sale agreement with
Curative, pursuant to which the Company will fund the construction
and development costs of the Facility in exchange for the right to
purchase 50% of the cannabis products and cannabis trim produced at
the Facility at an offtake price equal to Curativeâs direct cost of
cultivation plus 10%.
Additionally, the Company shall be granted: (i) a right of first
refusal over any future expansion of the Facility and/or the
proposed construction of any new cannabis production facility by
Curative and if the Company exercises such right of refusal it
shall be entitled to receive a comparable offtake purchase
arrangement as it received under the Transaction; and (ii)
unfettered access and control to Curativeâs Genetic Library which
can be transferred (at the Company's discretion), used and
cultivated by the Companyâs properly licensed subsidiaries,
affiliates or commercial partners.
Hugo Alves, President and Director of Auxly Cannabis Group
commented: âCurative is a highly valued partner to Auxly, having
been a part of the Auxly family since the inception of the Company.
That being said, we could not be more pleased to have reached this
stage of the project and to be signing a definitive agreement with
Curative. Curativeâs optimization of indoor cultivation combined
with their unique genetics will provide a highly desirable product
offering to the Canadian recreational cannabis markets and to the
Auxly platform as a whole. We are pleased to be working with Dave,
Scott and their team as they build out additional phases of this
project and bring their product to market.
On a related note, we would like to thank the municipality of
Chatham-Kent for the tremendous support they have provided to the
Curative project. We look forward to continuing to work with the
municipality of Chatham-Kent to create economic value in the
region.â
Closing of the Transaction is subject to customary closing
conditions, including: (i) the execution of the long-term cannabis
purchase and sale and a unanimous shareholdersâ agreement with the
Curative shareholders, and (ii) the acceptance of the TSX Venture
Exchange. The Consideration Shares will be subject to a statutory
hold period of four months and one day, in accordance with
applicable securities laws.
ON BEHALF OF THE AUXLY BOARD
"Chuck Rifici" Chairman & CEO
About Auxly Cannabis Group Inc. (XLY.V) (CBWTF)
Auxly is a vertically integrated cannabis company with diverse operations across Canada and Uruguay. The company was formed with the primary intent of providing financing solutions to cannabis licence applicants, and has evolved into a platform spanning the entire cannabis value chain. Auxlyâs management believes that a vertically integrated model, adapted for the cannabis space, allows for substantive control over its operations through increased operational flexibility, economic resiliency and improved product margin dynamics in an effort to create long term shareholder value. Auxly currently operates three distinct, yet synergistic, segments:
⢠Upstream â Auxlyâs diverse cannabis cultivation platform across its streaming partners, joint ventures and wholly-owned subsidiaries;
⢠Midstream â Auxlyâs processing and development platform focused on the development of proprietary cannabis-derived products and related intellectual property to address consumer needs through its wholly-owned subsidiary, Dosecann; and
⢠Downstream â Auxlyâs medical, recreational and international distribution platform.
Investor Relations:
For more information about investing in Auxly Cannabis Group Inc.,
please visit: http://www.auxly.com or contact our Investor
Relations Team:
Email: [email protected]
Phone: 1.833.695.2414
Stay Connected:
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Media Enquiries (only):
For media enquiries or to set up an interview please contact:
Sarah Bain, VP External Affairs
Email: [email protected]
Phone: 613.230.5869
Notice Regarding Forward Looking Information:
This news release contains certain "forward-looking information" within the meaning of applicable Canadian securities law. Forward-looking information is frequently characterized by words such as "plan", "continue", "expect", "project", "intend", "believe", "anticipate", "estimate", "may", "will", "potential", "proposed" and other similar words, or information that certain events or conditions "may" or "will" occur. This information is only a prediction. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking information throughout this news release. Forward-looking information includes, but is not limited to: the ability of the Company to obtain the necessary regulatory approvals to complete the Transaction, including receipt of the approval of the TSX Venture Exchange, expectations of future growing capacity at the Facility and the related costs, the completion of the planned build-out and expansions, including the timing thereof, requirements to obtain additional financing for such build-out and expansions, the ability to satisfy the conditions required to obtain the Facilityâs cultivation and sales license, timeliness of government approvals for granting of permits and licenses, actual operating performance of the Facility, the growth of Curative and timing thereof, regulatory or political change, competition and other risks affecting the Company in particular and the cannabis industry generally.
A number of factors could cause actual results to differ materially from a conclusion, forecast or projection contained in the forward-looking information in this release including, but not limited to, whether: either the Company or Curative being unable comply with its respective obligations under the agreements governing the Transaction, failure of Curative to complete construction of Facility on the timeline indicated or at all, failure of Curative to obtain the required licenses to cultivate and sell cannabis products, and general economic, financial market, regulatory and political conditions in which the Company operates will remain the same. Additional risk factors are disclosed in the revised annual information form of the Company for the financial year ended December 31, 2017 dated May 24, 2018.
New factors emerge from time to time, and it is not possible for management to predict all of those factors or to assess in advance the impact of each such factor on the Company's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking information. The forward-looking information in this release is based on information currently available and what management believes are reasonable assumptions. Forward-looking information speaks only to such assumptions as of the date of this release. In addition, this release may contain forward-looking information attributed to third party industry sources, the accuracy of which has not been verified by the Company. The purpose of forward-looking information is to provide the reader with a description of management's expectations, and such forward-looking information may not be appropriate for any other purpose. Readers should not place undue reliance on forward-looking information contained in this release.
The forward-looking information contained in this release is expressly qualified by the foregoing cautionary statements and is made as of the date of this release. Except as may be required by applicable securities laws, the Company does not undertake any obligation to publicly update or revise any forward-looking information to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.