CannaSouth Produce Inc. (CSE: CANN) (OTC: CNPRF) (Frankfurt: “CANN.F”) is a publicly traded company that engages in the cultivation, production and distribution of cannabis and cannabinoid products throughout Canada. CannaSouth Produce Inc. is now in the process of acquiring the 10% ownership in Cannasouth for CA$580,000. The acquisition will occur through a CannaSouth subsidiary, named “CannaSouth Industrials Limited.” The Company is also in step with its strategy to increase its distribution network throughout Canada and the US.
Cannasouth Cannabis Management Corp. (Canna) is pleased to announce that it has entered into an agreement to purchase all of the shares of the company’s joint venture partners. There will be no cash consideration exchanged for the shares of the joint venture partners. Cannasouth will acquire the assets of the joint venture partners and any cash or shares of the joint venture partners will be transferred to the company. The total purchase price per share will be paid in the form of common shares of the company. The agreement is subject to the approval of the TSX Venture Exchange.
Leading medicinal cannabis company Cannasouth Limited today entered into two conditional agreements to acquire the remaining shares it does not already own in its combined cultivation and production businesses.
Acquisition of the remaining shares of Cannasouth Cultivation Limited
Cannasouth has entered into a conditional agreement with Aaron Craig and members of his family (Craig Family Interests) to acquire the remaining 50% interest in the Cannasouth Cultivation Limited joint venture that Cannasouth does not already own.
Cannasouth Cultivation has built a state-of-the-art cultivation and processing facility that will produce medical cannabis flower biomass at a very competitive price. It is more energy efficient and environmentally friendly than growing indoors.
The plant, which is designed to produce high quality biomass in accordance with Good Agricultural and Collection Practices (GACP) and Good Manufacturing Practices (GMP) for the pharmaceutical industry, is currently in the installation and verification phase. The new facility is expected to have sufficient capacity to generate revenues of approximately $8 million per year (based on current conservative world market prices), assuming Cannasouth Cultivation enters into commercial supply agreements and completes quality certification. The object was designed to be evolutionary.
Mark Lucas, CEO of Cannasouth, said: Worldwide, there is a high demand for pharmaceutical grade cannabis flowers. The timing of the acquisition allows all future crop revenues to be included in the Cannasouth Group’s financial results. It will also allow the company to control all aspects of its growing business.
Cannasouth would like to take this opportunity to thank the Craig family for their support and expertise as a valuable joint venture partner in the development of such a high level of innovative and cost-effective grow facility.
The acquisition of the remaining interest in Cannasouth Cultivation is conditional on the company being sold by 30 June 2010. Completion of the Cannasouth Cultivation acquisition is expected to occur shortly after the satisfaction of this capital increase condition.
Acquisition of the outstanding shares of Midwest Pharmaceutics NZ Limited.
Cannasouth has also entered into a conditional agreement with Mark Balchin and Greenmeadows Health Limited to acquire the remaining 40% stake in Hawkes Bay-based Midwest Pharmaceutics NZ Limited which it does not already own.
Cannasouth currently owns 60% of Midwest. This business generates revenues of approximately $2 million per year, which will be included in Cannasouth’s financial results from the date of acquisition, following the closing of the transaction.
Mark Lucas said: The acquisition of Midwest gives Cannasouth the opportunity to streamline operations and generate additional revenue from its existing business as it prepares to produce GMP-certified medicinal cannabis.
Mark Balchin, CEO of Midwest, will continue to serve as the group’s chief operating officer.
The Midwest transaction is contingent on the parties gaining approval from several owners and regulators to take control of Midwest by the 31st. August 2021 to be amended.
Business benefits of acquisitions
- 100% control of the cultivation and production facilities of the joint venture.
- Accelerate the path to significant revenue generation.
- Improved operational efficiency across the Group.
- Post-acquisition revenues and 100% of future revenues will be included in the Cannasouth Group’s financial results.
- Opportunity to generate additional revenue from existing operations in the Midwest and position the company for GMP certified medicinal cannabis production.
Cannasouth plans to raise capital to fund acquisitions. The Company is currently finalizing its fundraising strategy and will provide detailed information to the market in due course.
-ENDS-
For more information, visit www.cannasouth.co.nz or contact us:
About Cannasouth Limited
Cannasouth is a biopharmaceutical research and development company based in the heart of the Waikato region of New Zealand. The company was founded to focus on the commercial development of the medically beneficial properties of cannabinoid compounds such as CBD, THC and related chemical structures produced by the cannabis plant. Our goal is to develop a new generation of cannabinoid medicines that keep patients healthy and improve the quality of their lives. Our products are manufactured according to GMP regulations, with environmentally friendly methods, without the use of harmful chemicals or solvents, to ensure that patients are treated with pure therapeutic cannabinoid compounds of the highest quality. The Cannasouth Group holds commercial licenses for the cultivation, storage, production and supply of medical cannabis, issued by the Medical Cannabis Agency.
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