ABcann Enters into Agreement to Acquire Leading Medical Cannabis Clinic
NAPANEE, Ontario and CALGARY, Alberta, Dec. 12, 2017 (GLOBE NEWSWIRE) — ABcann Global Corporation (TSXV:ABCN) (“ABcann” or the “Company”) is pleased to announce that it has entered into a binding letter of intent dated December 11, 2017 (the “LOI”) to acquire (the “Acquisition”) all of the outstanding securities of Harvest Medicine Inc. (“HMED” or “Harvest Medicine”). This transaction unites the high-quality, precision growing focus of ABcann with the high-quality, customized patient focus of HMED. As Canada’s fastest growing medical cannabis clinic, Harvest Medicine has educated and serviced over 8,500 active patients since opening in February 2017.
Harvest Medicine is a great partner for us, and the Acquisition will be immediately accretive to our shareholders. Their professional, patient-focused approach is aligned with ABcann’s philosophy of quality and innovation. This represents one initial step of many as we begin the execution of our aggressive growth strategy.
Barry Fishman, ABcann’s CEO
Under the terms of the LOI, at the closing of the Acquisition (the “Closing”), ABcann will:
- make a $1,500,000 cash payment (less amounts needed to settle certain outstanding liabilities of HMED);
- issue 1,056,338 common shares in the capital of ABcann (each, an “ABcann Share”) having an aggregate value of $1,500,000, based on a deemed price of $1.42 per ABcann Share, which will be deposited into escrow and released in equal quarterly amounts over the three-year period following the Closing; and
- pay future consideration in the form of cash or ABcann Shares, post-Closing, if certain performance milestones, which include certain patient, revenue and profitability metrics, are achieved.
ABcann has also committed to investing $1,500,000 to enable HMED to execute its expansion plans and take its proven recipe for delivering patient value to several new clinics. Under the terms of the Acquisition, Harvest Medicine will maintain its commitment to being an open platform, that enables patients to register with the Licensed Producer of their choice.
At the Closing, Harvest Medicine founder and CEO, Shekhar Parmar, is expected to join ABcann’s executive team as Chief Strategy Officer and remain CEO of HMED. Mr. Parmar, a lawyer and entrepreneur, brings to ABcann extensive knowledge of the medical cannabis market and a unique perspective on patient needs. HMED has earned the trust of its active patient base of over 8,500 patients by providing unmatched focus on face-to-face patient communication, service and education.
Harvest Medicine was fortunate to have our choice of partners to help us grow and take the steps required to bring our patient-centric model to Canadians from coast-to-coast. ABcann impressed us with their quality focus and entrepreneurial culture. I look forward to joining ABcann’s executive team as Chief Strategy Officer, and to continuing in the role of CEO of Harvest Medicine as we scale-up our proven business model.
Shekhar Parmar, Harvest Medicine founder and CEO
The closing of the Acquisition is subject to customary conditions, including the completion of satisfactory due diligence, the execution of a definitive agreement, and the receipt of applicable third party and regulatory approvals, including that of the TSX Venture Exchange (the “TSXV”).
About Harvest Medicine:
Harvest Medicine is an education focused, patient-centric, cannabis discovery center and clinic that has received tremendous response from its patients. Growing to over 8,500 active patients in under 10 months, and now acquiring over 1,200 new patients monthly from a single location, HMED is one of Canada’s most successful and fastest growing cannabis clinics.
Harvest Medicine is poised to expand its successful and highly scalable location in Calgary across the country. The first of these new clinics will open in Edmonton in the spring of 2018 with other locations around the country being evaluated. Using a highly trained team of medical doctors and Canna Genius educators, Harvest Medicine provides a welcoming environment that focuses on educating patients on the safe and effective use of medical cannabis.
About ABcann Global:
ABcann holds production and sales licenses from Health Canada. Its flagship facility in Napanee, Ontario contains proprietary plant-growing technology, centred on its specially designed, environmentally-controlled growing chambers. This approach results in the production of pesticide-free, pharmaceutical-grade cannabis products.
The Company is expanding its cultivation capacity and pursuing partnership and product development opportunities domestically, as well as in select international markets, such as Germany, Australia and Israel.