MPX Enters Into Management and Option Agreement With Dispensary in Baltimore, Maryland
TORONTO, Jan. 31, 2018 (GLOBE NEWSWIRE) — MPX Bioceutical Corporation (the “Company” or “MPX”) (CSE:MPX) (OTC:MPXEF) is pleased to announce the Company, through its indirect wholly-owned subsidiary, S8 Management, LLC (“S8 Management”), is entering into a management agreement (the “Management Agreement”) with GreenMart of Maryland, LLC (“GreenMart MD”), which is authorized to operate a dispensary and sell medical cannabis products in Maryland. Pursuant to the management agreement, S8 Management will provide all management services typically required by a dispensary facility of similar type and size of GreenMart, including but not limited to, all staffing, materials, equipment, logistical support, accounting and other administrative functions, contractor selection, advisory services and any other requirements essential to the successful operation of GreenMart.
In addition to managing the facilities, the Company, through its wholly-owned subsidiary, CGX Life Sciences, Inc. (“CGX”), will concurrently acquire an option from The Elizabeth Stavola 2016 NV Irrevocable Trust (the “Seller”) to purchase 100% of the issued and outstanding membership units of GreenMart at an exercise price of US$1.00 for an option period of two (2) years. CGX may not exercise the option until ninety (90) days following the award by the Natalie M. LaPrade Maryland Medical Cannabis Commission (the “Commission”) of a license authorizing or permitting GreenMart to dispense medical cannabis in the State of Maryland in Senatorial District 6 (the “Final Dispensary License”). To acquire the option, CGX is paying the Seller an option premium of US$2,500,000.
GreenMart will operate a dispensary, under the “Health for Life” brand, in a high-traffic area of Baltimore, Maryland, situated off of North Point Road in the community of Colgate. The location is conveniently located near Interstate Routes 695, 95 and US Route 40 and a 15-minute drive from Baltimore’s Inner Harbour, Canton Waterfront, Federal Hill, and Fells Point. Within 2 miles of the location sits Johns Hopkins Bayview Medical Center, a teaching hospital within the world renowned John Hopkins Health System. GreenMart has been welcomed and supported by the community leaders of Colgate. The dispensary is currently under construction and is expected to be operational in April 2018 of this year.
With only a very limited number of licenses permitted, the GreenMart transaction strengthens our first-mover advantage in Maryland. Upon completion of licensing approval for GreenMart and final inspection of the dispensary, we expect the facility to open its doors and to commence selling cannabis-based medicines to Maryland patients early in the second quarter of 2018. With this addition, MPX companies will be managing three dispensaries in Maryland and one of only fifteen concentrate processing operations.
W. Scott Boyes, Chairman, President and CEO
The acquisition of the membership units of GreenMart was originally contemplated as part of the acquisition of the group of Arizona incorporated entities that provide material support, including real estate rental, administrative, general management and advisory services, financing and logistics, to medical marijuana businesses licensed under the provisions of the Arizona Medical Marijuana Act, A.R.S. Title 36, Section 28.1 (the “AMMA”), being Health for Life, Inc. (“HFL”) and Soothing Options Inc. (“Soothing Options”), both Arizona not for profit corporations, which directly own, possess or sell marijuana or any marijuana-infused products (the “Business”) in January 2017.
Cannabis Market in Maryland
In 2012, a State law was enacted in Maryland to establish a state-regulated medical marijuana program. Legislation was signed in May 2013 and the program became operational on December 1, 2017.
Originally envisioned to restrict cannabis cultivation and distribution in Maryland to academic medical centers that closely monitored patients, the legislation was revamped to its current form in 2014 under House Bill 881. By September 2016, Maryland state officials were considering more than 800 applications for prospective dispensaries throughout the state. Under Maryland regulations, there is a cap of 102 dispensary licenses (only 10 of which are currently licensed), limited to two per state senatorial district. Further, the Commission has only awarded 14 licenses to grow medical marijuana (out of a pool of almost 150 applicants) and a further 12 licenses to process medical marijuana into pills, oils and other processed products.
With over 8,500 patients currently certified for use of medical marijuana (over 12,000 signed up to become eligible) and over 550 medical practitioners registered to certify patients as eligible, the market in Maryland is expected to be worth US$221 million by 2021 (Source: New Frontier).
About MPX Bioceutical Corporation
MPX, an Ontario corporation, through its wholly owned subsidiaries in the U.S., provides substantial management, staffing, procurement, advisory, financial, real estate rental, logistics and administrative services to two medicinal cannabis enterprises in Arizona operating under the Health for Life (dispensaries) and the award-winning Melting Point Extracts (high-margin concentrates wholesale) brands. The successful Health for Life brand operates in the rapidly growing Phoenix Metropolitan Statistical Area.
The recently acquired GreenMart of Nevada NLV, LLC (“GreenMart”) is an award winning licensed cultivation, production and wholesale business, licensed for both the medical and “adult use” sectors in Las Vegas, Nevada, and is already selling wholesale into the Nevada medical cannabis market. GreenMart has also optioned suitable locations and intends to enter the higher-margin retail arena by applying for at least two dispensary licenses in the Las Vegas market which will operate under the “Health for Life” brand.
The Company owns assets in Massachusetts supporting cultivation, production and up to three dispensaries, and with the closing of this most recent transaction, MPX manages two full service dispensaries and one producer in Maryland.
MPX continues to expand its U.S. footprint, and has recently acquired management companies that provide operational and other services to two dispensaries and one production license in Maryland. The Company also leases a property in Owen Sound, Ontario, for which an application to Health Canada has been made for a cannabis production and sales license. In addition, the Company will continue its efforts to develop its legacy nutraceuticals business.