Khiron Life Sciences Signs Binding LOI to Acquire 100% of NettaGrowth, Securing the First Medical THC and CBD Cannabis Licence and Cultivation Capacity in Uruguay, and Entry to the Brazilian Market
TORONTO, Jan. 25, 2019 /CNW/ – Khiron Life Sciences Corp. (“Khiron” or the “Company”) (TSXV: KHRN), (OTCQB: KHRNF), (Frankfurt: A2JMZC), an integrated medical cannabis company with its core operations in Latin America, announced today that the Company has entered into a binding letter agreement dated January 24, 2019 to acquire 100% of NettaGrowth International Inc. (“NettaGro”), an arm’s length party, which will own, at the time of completion of the transaction, all the outstanding shares of Dormul S.A. (doing business as Cannapur). Dormul has obtained the first licence to produce medical cannabis with THC for commercialization in Uruguay. With this acquisition, Khiron will be able to significantly expand its cultivation capacity to a third jurisdiction, and through the Mercosur Regional Free Trade Bloc, will gain access to an export market of approximately 75 million people in Southern Brazil. As consideration for the acquisition of NettaGro, Khiron will issue 8,498,821 common shares to the shareholders of NettaGro, at a deemed price of $1.61 per common share.
Upon completion of the acquisition of NettaGrow, renowned Canadian entrepreneur Joseph Mimran will join the board of Khiron’s Colombian operating subsidiary and will provide strategic counsel to Khiron on packaged goods and retail development for the Latin American market. Mr. Mimran is Co-founder and Chairman of Gibraltar and Company, and an internationally recognized brand and retail concept visionary known for brands such as Joe Fresh and Club Monaco.
Michael Beck, an equity investor with extensive experience in venture capital, has agreed, subject to receipt of all required approvals, to join Khiron’s board of directors following the completion of the transaction.
Uruguay was the first country to establish legislation for cannabis and Dormul has secured a medical cannabis cultivation and commercialization licence for the jurisdiction, with a cultivation capacity of up to 120 tonnes and 170,000 plants. In addition, Dormul has an application pending for its extraction licence. Upon receipt of its extraction licence, Dormul is expected to become the first company in Uruguay to be approved for medical cannabis based CBD oils for both domestic and export purposes. With a strong commitment to research and development, Dormul has established a strategic partnership with the prestigious Institut Pasteur de Montevideo, a foundation between the Uruguayan and French governments, and was recently recognized by the Uruguayan Ministry of Industry for the important social and economic impact its operations will have for the country.
Marco Algorta, Dormul’s founder, stated, “As we develop our patient network in Uruguay and into Brazil, joining the Khiron family gives us access to their market leading expertise and resources, to accelerate our research and development mission, and to deliver medical cannabis products across one of the world’s largest trading blocs. We begin with Uruguay, and export to Southern Brazil, and expect to move quickly across the regions trading countries.”
This acquisition marks a significant advancement on our strategy to serve the largest markets in Latin America. Like us, NettaGro is a market innovator that is shaping how and where the cannabis industry grows across the region. Welcoming Joseph Mimran and Mike Beck ensures we execute on the potential that NettaGro offers, bringing us exceptional global expertise and unmatched market access.
Alvaro Torres, Khiron Co-founder and CEO.
South America, which includes Uruguay, represents a population of 417 million people, of which countries with approximately 350 million people have recent or pending legislation permitting access to cannabis and/or CBD oils for medicinal use. Of these, Brazil is poised to become the largest Latin American cannabis market with an overall population of 208 million.
Completion of the transaction is subject to the execution of a definitive agreement and receipt of all required regulatory approvals, including final acceptance of the TSX Venture Exchange.
About NettaGro and Dormul
NettaGro, through Dormul, is a Latin America export focused cannabis company based in Uruguay, and is well positioned to serve Brazil and the growing Latin American market. They will employ the latest growing, extracting and processing technologies to produce high quality medical cannabis products for the Latin American market.
Khiron Life Sciences Corp. is positioned to be the dominant integrated medical cannabis company in Latin America. Khiron has core operations in Colombia and is fully licenced in the country for the cultivation, production, domestic distribution, and international export of both THC (tetrahydrocannabinol) and CBD (cannabidiol) medical cannabis. In May 2018, Khiron listed on the TSX Venture Exchange, becoming one of the first Colombian-based medical cannabis companies to trade on any exchange globally.
With a focused regional strategy and patient oriented approach, the Company combines global scientific expertise, agricultural advantages, branded product market entrance experience and education to drive prescription and brand loyalty to address priority medical conditions such as chronic pain, epilepsy, depression and anxiety in the Latin American market of over 620 million people. Khiron is led by Co-founder and Chief Executive Officer, Alvaro Torres, together with an experienced executive team, and a knowledgeable Board of Directors that includes former President of Mexico, Vicente Fox.
Further information on Khiron Life Sciences can be found at https://investors.khiron.ca/