Harvest One Cannabis Inc. Announces new Agreements with PanCann Streaming Corp to Advance the Construction of their Lucky Lake Facility and a new Additional Facility
TORONTO, ONTARIO–(Marketwired – May 1, 2017) – Harvest One Cannabis Inc. (TSXV: HVST) (“H1“, “Harvest One” or the “Company“) through its wholly owned subsidiaries United Greeneries Ltd. (“UG”) and United Greeneries Saskatechwan Ltd. (“UGS”) is pleased to announce that it has entered into two separate interim agreements with PanCann Streaming Corp. (“PanCann”) to finance the construction of both the Lucky Lake facility and a new additional facility to be identified, in consideration for an equity participation in the applicable entity and a production yield allocation from both facilities. These agreements, if funded, would allow UG to substantially increase its production capacity of medical and recreational cannabis (as applicable) without any capital outlay or further dilution to H1’s shareholders.
Highlights of the Agreements:
Agreement 1: Lucky Lake Agreement
PanCann will provide all necessary funding to complete the construction of the Lucky Lake factility and provide sufficient working capital for its initial operations and in consideration for doing so will receive 49% of the equity of UGS and 40% of the production yield generated by the Lucky Lake facility at a price per gram equal to the cost of production + 10%.
Agreement 2: Additional Site Agreement
The parties will work cooperatively to source an additional expansion site that will be developed by a wholly-owned subsidiary of UG (“NewCo”). Once such site and the construction budget for the new facility have been agreed, PanCann will provide all necessary funding to complete the construction of the new facility and provide sufficient working capital for its initial operations and in consideration for doing so will receive 49% of the equity of NewCo and 50% of the production yield generated by the new facility at a price per gram equal to the cost of production + 10%.
The agreements remain subject to a number of conditions precedent, including availability of financing on the part of PanCann, receipt by H1 of applicable Health Canada and other regulatory approvals, due diligence by the parties, execution of definitive agreements, and the ability of the parties to agree future construction budgets and timelines. There is no assurance that these financings will be completed on the terms contemplated herein or at all.
On completion of Lucky Lake, UG anticipates that the facility will have at least 60,000 square feet of cultivation space. The new additional facility, once chosen by H1 and accepted by PanCann, will be designed to accommodate an additional minimum 60,000 square feet of cultivation space. This combined with the current and fully funded expansion on 13 acres at the existing and operational Duncan growing facility would give UG in excess of 250,000 total square feet of cultivation space.
This is a excellent opportunity for Harvest One, as it will allow us to substantially increase our group’s cannabis production capacity without any further outlay of capital. We are also excited to form a long-term partnership with PanCann, considering their excellent management team.
Andreas Gedeon, Managing Director and CEO of Harvest One
About Harvest One
Harvest One Cannabis Inc. (TSXV: HVST) controls operations across the entire cannabis value chain through three business units, with Harvest One serving as the umbrella company over horticultural arm United Greeneries and medical arm Satipharm AG. Each business is strategically located in favourable jurisdictions with supportive regulatory frameworks in place. United Greeneries has received a Canadian medicinal cannabis cultivation licence, making Harvest One one of only a few companies globally with the capacity to commercially cultivate cannabis in a federally regulated environment.
Original press release: http://www.marketwired.com/press-release/harvest-one-cannabis-inc-announces-new-agreements-with-pancann-streaming-corp-advance-tsx-venture-hvst-2213089.htm
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