Vancouver, B.C., September 21, 2018 – HERITAGE CANNABIS HOLDINGS CORPORATION (CSE: CANN) (“Heritage” or “Company”) is pleased to announce that it has entered into a binding letter of intent, effective September 19, 2018, whereby the company intends to acquire all of the issued and outstanding shares of Purefarma Solutions Inc. (“Purefarma”) in an all-share transaction.
Purefarma, based in Kelowna, BC, is a manufacturer and wholesale processor of premium CBD oils. This strategic acquisition provides Heritage an established pathway into the Canadian retail and wholesale, as well as overseas markets. Purefarma brings an experienced extraction team which is a key part of the overall vision for Heritage to provide significant market access to both the existing PhyeinMed LP while positioning itself to utilize CannaCure’s scalable production. With revenues last year of approximately $2 million, and EBITDA of $500,000, this foundation gives a clear line of sight to expanded revenue. Purefarma has an existing supply agreement for 1,600 acres of hemp available through partner farmers, which will be harvested this season and available for the 2019 consumer market.
Under the terms of this arms-length agreement, shareholders of Purefarma will receive 33,333,333 shares of Heritage at a cost base of $0.30 per share, resulting in the Purefarma shareholders owning 14% of the issued and outstanding shares of Heritage. Additionally, they have a potential to earn 16,000,000 shares subject an earn out based upon certain gross margin milestones achieved on an annual basis over the next four years. In addition, shareholders of Purefarma will receive certain royalties for 2019 through 2022 on a diminishing basis, based upon achieving certain gross margin milestones. This transaction will provide Heritage with the infrastructure, technology, and expertise in order to more quickly enter the extraction business once a license has been received. More details will be provided upon completion of a Definitive Agreement.
"This transaction is a revolutionary step for Heritage as we are taking a meaningful position in the CBD extraction industry in Canada," states Clint Sharples, Chairman and Interim CEO of Heritage. "As many in this industry have realized, the extraction business is exciting yet difficult to execute. By adding the experts from Purefarma, a team of recognized industry leaders in the extraction business, we have provided Heritage and its subsidiaries a platform to position itself on the global stage, and move us into a whole new phase.”
Upon completion of this transaction, Purefarma will be adding one person to the board of directors of Heritage.
Graeme Staley, CEO of Purefarma, says, "We are very excited to do this transaction with Heritage, and to work with the other subsidiaries to create much higher corporate value. For us, the timing of this transaction is perfect as, Heritage is adding a number of key pieces to its platform, we’re installing our fourth co2 extraction unit in addition to our ethanol and hydrocarbon system we have previously built. This expansion doubles our liquid co2 extraction output infrastructure with the intention to expand our market overseas and prepare for the next evolution of legalization in Canada."
Vancouver, B.C., October 30, 2018 – HERITAGE CANNABIS HOLDINGS CORPORATION (CSE: CANN) (“Heritage” or “Company”) targeted subsidiary Purefarma Solutions Inc. (“Purefarma”) is pleased to update that its Saskatchewan based joint venture partner, has completed harvesting over 1,000 acres hemp, and is on schedule for the full 1,600 acres planned for this year. Once the full harvest and quality checks are complete, Purefarma expects to take delivery of 1,100 acres of x-59, and 500 acres of Canda strains.
Hemp samples have been received, quality checks are ongoing, and the material is ready to start being brought into the LP environment. The approximate weight for this year’s harvest is anticipated to exceed 80,000 kg, which is meeting previous expectations.
In addition to the previously planned 1,600 acres, Purefarma is evaluating other supply options which, if acceptable, could be a considerable addition to this year’s raw material supply.
“This year’s hemp harvest was the most ambitious in our history.” says Graeme Staley, President of Purefarma “we are pleased with the results and we’re looking forward to begin processing it in our expanded network.”
Clint Sharples, Chairman and interim CEO of Heritage states “The expansion of the Purefarma business is integral to our future plans, and the success of this year’s hemp harvest puts us nicely on track to achieve our projected revenue in 2019.”