Acquisition will add innovative wellness brand combining cannabis and holistic medicine, including a premium hemp-derived CBD product portfolio
VANCOUVER, BC / TheNewswire / June 11, 2019 – Cannex Capital Holdings Inc. (CSE: CNNX) (OTCQX: CNXXF) (“Cannex” or the “Company”) is pleased to announce that it has closed its previously announced acquisition of 100% of San Diego, California-based Pure Ratios Holdings, Inc. (“Pure Ratios”) in a cash and stock transaction (the “Transaction”).
– Pure Ratios has authentic positioning in the cannabinoid wellness segment with a solid foundation in California;
– Pure Ratios has expertise integrating cannabinoids into a variety of form factors including a patented 96-hour transdermal patch, its best-selling product;
– Pure Ratios co-founder and CEO, Chad Conner, is an experienced practitioner of holistic medicine and a recognized public speaker on cannabis and alternative approaches to wellness.
The Pure Ratios brand was established in 2015 to develop and distribute products that combined holistic wellness concepts with CBD, THC, and other cannabinoids, first in California and then nationally. Its first products were created by combining traditional Chinese medicines with cannabis and hemp-derived CBD. Pure Ratios’ CBD products are sold online, through a network of naturopathic medicine practitioners, and in over 300 health food stores, while its THC-enhanced products are sold by licensed California cannabis manufacturers and distributors, as well as being manufactured and distributed in other states by licensed cannabis businesses that license Pure Ratios’ intellectual property.
We are incredibly pleased to welcome Pure Ratios into Cannex. Pure Ratios’ focus on wellness products is a terrific complement to Cannex’s existing suite of adult-use cannabis brands. We looked at numerous companies in the CBD/wellness space, but we connected with the authenticity and unique positioning which Chad and his team have built in Pure Ratios.
Anthony Dutton, Cannex CEO
“Since we signed the binding LOI in February, which included a modest loan to jumpstart growth, we’ve seen truly impressive month-over-month revenue growth that we expect to continue post-acquisition. With our pending business combination with 4Front Holdings, LLC, we are particularly excited by how the combined capabilities and geographic reach can extend growth for Pure Ratios and the collective platform.”
Pure Ratios was created to help people through combining holistic medicine, something I’ve practiced for years, with cannabinoids. When we looked for a partner to help us accelerate our growth, particularly to support the penetration of our proprietary formulations through market and supply chain expertise, we immediately were in synch with the Cannex team and the strong operational capabilities we plan to lean on.
Chad Conner, Pure Ratios CEO
We are poised to capitalize on our early advantage in the CBD market and to launch our expanded product portfolio, including our range of THC-enhanced products, and with the pending 4Front-Cannex combination, we see great opportunity to expand our reach.
Cannex will pay Pure Ratios’ shareholders consideration of US$1,000,000 cash, 3,500,000 shares of Cannex common stock, and assumption and/or repayment of up to US$500,000 debt. Additionally, Cannex will provide US$1,000,000 growth capital to Pure Ratios, of which US$500,000 has already been provided by a secured convertible promissory note prior to closing. Upon the satisfaction of certain sales targets by Pure Ratios within one year of closing, Cannex will issue Pure Ratios’ shareholders up to an additional US$1,000,000, and upon the satisfaction of certain sales targets two years from closing Cannex will issue up to an additional US$1,500,000 in Cannex stock priced at US$1.18. This transaction is not a significant transaction per applicable securities regulations and CSE policies.
4FRONT TRANSACTION UPDATE
“Cannex and 4Front are making substantive progress on meeting the requests supplied by the Department of Justice within the second request for information related to our HSR filing,” said Anthony Dutton. “It remains challenging to offer a precise timeline. However, it is my expectation that we can navigate this process within the next several weeks and provide a more concrete closing timeline shortly. Both parties remain committed to consummating the transaction as efficiently as possible and we look forward to having this administrative burden behind us to fully harness the benefits of this combination.”
About Cannex Capital Holdings Inc.
Cannex, through its wholly-owned subsidiaries, provides a wide range of services including real estate, management, financial, branding and IP to licensed cannabis business operators domestically and internationally. Cannex is focused on premium indoor cultivation, extraction, manufacturing and branding of edible and derivative products as well as retail operations. Cannex is undertaking expansion initiatives to support the acquisition and development of additional assets in legal medical and recreational cannabis markets. Based in Vancouver, BC, Cannex is managed by a team of experienced industry and capital markets experts who are committed to aggressive, cost-effective growth. Cannex currently owns BrightLeaf Development LLC which holds real estate assets, property leases, brands and intellectual property, and material supply agreements with Superior Gardens LLC (d/b/a Northwest Cannabis Solutions), Washington State’s and the Pacific Northwest’s largest full-line cannabis producer/processor, as well as 7Point Holdings LLC, another Washington State licensed cannabis producer/processor.