Sunniva to Pursue NASDAQ and TSX Listings for its Canadian Operations

Sunniva Inc. to Spin Out and List Canadian Assets on Toronto Stock Exchange and NASDAQ Stock Market to Unlock Shareholder Value

Vancouver, British Columbia–(Newsfile Corp. – July 10, 2018) – Sunniva Inc. (CSE:SNN) (OTCQX: SNNVF) (“Sunniva” or the “Company”), a North American provider of cannabis products and services, is pleased to announce that it intends to spin out its Canadian assets into a separate Canadian entity and apply to list the shares on the Toronto Stock Exchange (“TSX”) and the NASDAQ Stock Market (“NASDAQ”) in an effort to unlock the underlying value of the Company’s assets on both sides of the border (the “Spinout Transaction”). The Company has retained Canaccord Genuity Corp. to act as a financial advisor in connection with the Spinout Transaction and other strategic initiatives.

The proposed Spinout Transaction of the Canadian assets would include Sunniva Medical Inc. (“SMI”), which is building the Sunniva Canada Campus, 740,000 square feet of purpose-built current Good Manufacturing Practice (“cGMP”) designed greenhouse facilities in British Columbia. SMI has a take or pay supply agreement with Canopy Growth Corporation (“Canopy”). Under the terms of the initial two-year agreement, which includes the distribution of Sunniva branded products, Canopy will purchase approximately 45% of Sunniva’s annual production capacity. The Canadian assets also includes Natural Health Services Ltd. which owns and operates a network of 7 clinics in Canada specializing in medical cannabis under the Access to Cannabis for Medical Purposes Regulations.

The US assets that would remain with the current Canadian Securities Exchange (“CSE”) listed entity include CP Logistics, LLC (“CPL”) operating the Sunniva California Campus, 489,000 square feet of state-of-the-art, purpose-built greenhouse facilities in Cathedral City, California that is currently under construction and includes a flagship onsite dispensary with a distribution license. CPL also operates a licensed extraction facility in Cathedral City, which began operations in June 2018, and has entered into services agreements to manufacture extracted products for significant brand partners in California and will continue to look to identify new business relationships and customers and expand its extraction capabilities at the facility. The Company also anticipates launching its first line of Sunniva branded products in the US in Q3, 2018. The US assets also include Full-Scale Distributors, LLC which through its brand, Vapor Connoisseur, is a provider of custom, private-label vaporizers and accessories to our brand partners.

Completion of the Spinout Transaction will require satisfying a number of conditions including Sunniva shareholder approval, CSE approval and fulfilling the listing requirements of the TSX and NASDAQ exchanges, none of which can be assured. Shareholders of Sunniva will receive an information circular in respect of the Spinout Transaction which will include information regarding the management, board of directors, financial statements and business plans of each of the entities. A meeting of the shareholders of Sunniva will be required.

Current Sunniva shareholders at the record date of the meeting will receive a proportionate number of shares in the new entity as part of the Spinout Transaction as well as continue to hold a proportionate number of shares in the current CSE listed entity. The shares of each company would then trade separately on their respective stock exchanges.

The Company expects the Spinoff Transaction will be completed prior to the end of 2018.

We feel Sunniva is undervalued and through the Spinoff Transaction we hope to unlock significant value for our existing shareholders. Creating a new Canadian company with our Canadian assets and listing them on the TSX and NASDAQ would be expected to bring added visibility and additional analyst coverage to our story and has the potential to attract institutional investors that are currently unable to purchase stock on the CSE or purchase companies holding US assets.

Dr. Anthony Holler, CEO of Sunniva

Dr. Holler continued, “Our CSE listed entity, Sunniva Inc., will continue to focus on full vertical integration in California and other states with a focus on potential mergers and acquisitions or partnerships, further expansion of licensed retail outlets, and the near term launching of Sunniva branded products. Our initial flagship 325,000 square foot purpose-built cGMP designed Sunniva California Campus in Cathedral City which includes our flagship Sunniva onsite dispensary is anticipated to be operational in Q4 2018 and our extraction facility commenced operations in June 2018.”

About Sunniva Inc.

Sunniva, through its subsidiaries, is a vertically integrated cannabis company operating in the world’s two largest cannabis markets — Canada and California — where we are committed to delivering safe, high-quality products and services at scale and creating trusted Sunniva branded cannabis products. Our vision is to become one of the lowest cost, highest quality vertically integrated cannabis producers in the markets we serve by building large scale purpose-built current cGMP designed greenhouses and further expansion of retail locations, offering better quality assurance with cannabis products free from pesticides, providing better customer access to cannabis education and sourcing better therapeutic delivery devices. Sunniva’s management and board of directors have a proven track record for creating significant shareholder value both in the healthcare and biotech industries.

For more information please visit: www.sunniva.com

Original press release

Before this cannabis stock news is here, it’s published to subscribers on 420 Investor.

Published by NCV Newswire
NCV Newswire
The NCV Newswire by New Cannabis Ventures aims to curate high quality content and information about leading cannabis companies to help our readers filter out the noise and to stay on top of the most important cannabis business news. The NCV Newswire is hand-curated by an editor and not automated in anyway. For questions contact us.

Get Our Sunday Newsletter