Health Canada issued Lotus Cannabis with a “standard cultivation” licence and a “sale for medical purposes” licence pursuant to Cannabis Act and Cannabis Regulations
VANCOUVER, British Columbia, March 11, 2019 (GLOBE NEWSWIRE) — Auxly Cannabis Group Inc. (TSX.V – XLY) (“Auxly” or the “Company“) today announced that its streaming partner, Lotus Ventures Inc. (“Lotus”), has been granted a “standard cultivation” licence and a “sale for medical purposes” licence by Health Canada pursuant to the Cannabis Act and Cannabis Regulations.
The licences give Lotus the ability to begin cultivation at its fully constructed 22,500 square-foot facility in Armstrong, British Columbia (the “Facility”).
Hugo Alves, President of Auxly said: “We want to congratulate Dale, Stephen, Scott, Carl, Monica and the rest of the Lotus team on obtaining their Cannabis Act licences! This is an important step for Auxly as we continue to diversify our supply chain, utilizing a network of subsidiaries and partners to provide reliable sources of diverse raw product. Lotus is a partner that we value deeply, being one of Auxly’s first streaming partners. We look forward to continuing to work closely with the team at Lotus during these exciting new phases of their business.”
Deal Terms with Lotus
Pursuant to the definitive agreement entered into on September 11, 2018 (the “Transaction”), Auxly advanced $4,000,000 to Lotus to partially fund the completion of the Facility, which was in addition to Auxly’s $1,000,000 subscription of units of Lotus completed in January 2018.
After completion of the Transaction, Auxly owned 5,755,868 common shares of Lotus and 1,000,000 five-year share purchase warrants exercisable at a price of $0.70. Additionally, Auxly is entitled to purchase or otherwise direct the sale of 50% of the Facility’s total production, which is expected to be 2,000 kg of cannabis per annum. Auxly also retains a right of first refusal to purchase the remaining 50% of cultivation output from the Facility, as well as a right of first refusal to finance a prescribed portion of the first expansion to the Facility and all or a portion of any further expansions of the Facility.
The Company also announces that it has settled CDN $441,000 of debt in consideration for the issuance of 450,000 common shares of the Company at a price of $0.98 per common share. The common shares issued pursuant to the shares for debt settlement will be subject to a statutory four month and one day hold period.
ON BEHALF OF THE BOARD“Chuck Rifici“ Chairman & CEO About Auxly Cannabis Group Inc. (TSX.V: XLY) (OTCQX: 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.
Auxly’s 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 – Auxly’s diverse cannabis cultivation platform across its streaming partners, joint ventures and wholly-owned subsidiaries;
• Midstream – Auxly’s 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 – Auxly’s medical, recreational and international distribution platform.
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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: expectations of future growing capacity at the Lotus facility; political change, future legislative and regulatory developments involving cannabis; and 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: Lotus can obtain all necessary governmental and regulatory permits and approvals for the facility, and whether such permits and approvals can be obtained in a timely manner; 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.