Laval, Québec, CANADA – July 18, 2019 – PRESS RELEASE – Neptune Wellness Solutions Inc., a North American cannabinoids extraction, formulation and packaging company, has completed a private placement with both existing and new institutional investors, led by Perceptive Advisors, resulting in gross proceeds to the company of US$41.4 million. John Moretz, chairman of the board, and Michael Cammarata, president and CEO of Neptune, invested US$5.0 million in the aggregate as part of this offering. Upon closing of the offering, the company issued an aggregate of 9,415,910 common shares of the company at a purchase price of US$4.40 per share.

“The Board joins me in thanking investors who participated in this offering and in welcoming our new shareholders to Neptune. Given recent contracts and the announced extraction capacity expansion plans, we are highly confident in the strength of Neptune’s business outlook,” said Moretz. “My incremental investment in Neptune reflects my conviction in our new CEO and management team and their ability to execute on Neptune’s strategy. We opted for this accelerated financing structure to stay on track with the previously announced SugarLeaf closing timeline.”

A portion of the net proceeds from the offering is expected to be used by the company to fund the initial consideration for the acquisition of the assets of SugarLeaf Labs LLC and Forest Remedies LLC, while the balance of such net proceeds is expected to be used for working capital and general corporate purposes. Neptune expects the SugarLeaf transaction to close on or before July 31, 2019.

“This financing comes at a pivotal point in the company’s cannabis growth trajectory, particularly given the need to expand our current annual capacity of 200,000 kg, which is fully contracted for both fiscal 2020 and fiscal 2021,” said Cammarata. “With this in mind, we look forward to closing the SugarLeaf transaction, which brings U.S.-based capacity, efficient production of high-quality extracts, and strong supplier relationships, all of which create a strong value proposition for our customers.”

Cowen acted as lead placement on the offering and the sole U.S. placement agent to the company. GMP Securities, L.P. acted as lead Canadian placement agent and Echelon Wealth Partners and Desjardins Securities also acted as placement agents for the company.

The securities sold in the offering have not been registered under the Securities Act of 1933, as amended, or any state or other applicable jurisdiction’s securities laws, and may not be offered or sold in the United States absent registration with the U.S. Securities and Exchange Commission (SEC) or an applicable exemption from the registration requirements of the Securities Act and applicable state or other jurisdictions’ securities laws. The securities sold in the offering will also be subject to standard statutory hold periods in Canada and the United States in accordance with applicable securities laws. The company has agreed to enter into a registration rights agreement with investors within 180-days following the closing of the offering whereby the company will to prepare and make necessary filings with the SEC to allow for the registration of the resale of shares sold in the offering.

Along with Cammarata, Moretz and Perceptive Advisors, certain other members of the board and management of the company participated in the offering. Participation of these insiders in the offering constitutes a “related party transaction” as defined in Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (MI 61-101). The offering is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as neither the fair market value of the securities issued to insiders nor the consideration for such securities by insiders will exceed 25 percent of the company’s market capitalization. The company did not file a material change report 21 days prior to closing of the offering as the details of the participation of insiders of the company in the offering had not been confirmed at that time.

VANCOUVER, July 18, 2019 /CNW/ - PRESS RELEASE - Choom has announced that an Alberta provincially approved cannabis retail licensee is opening a cannabis retail store in Lloydminster, Alberta operating under the Choom brand.

"We've been anticipating the opening of this store in Lloydminster for quite some time and we're really excited to finally be able to share our unique retail experience with the local community," said Chris Bogart, president and CEO of Choom.

The Choom-branded store is set to open on Saturday, July 20. The new store is located at 3B-5629 44 St., Lloydminster, Alberta. Opening hours are 10 a,m, – 8 p.m. (Monday to Wednesday), 10 a.m. – 10 p.m. (Thursday – Saturday), and 11 a.m. – 6 p.m. (Sunday). For more information, visit choom.ca.

In addition to a licensing agreement with the licensee, Choom has entered in a purchase agreement with the licensee, pursuant to which, subject to receipt of approval from Alberta's regulatory bodies, Choom will acquire the Lloydminster store.

The cannabis industry is being normalized by consumers and businesses across the U.S., and that means a lot of things for dispensary owners who are navigating this complex marketplace. For one, the customer base is expanding to new users and patients; education is a pillar of the cannabis retail space now.

But that education is equally important within the business. Cannabis dispensaries must put policies and training programs in place to guard against digital security breaches.

Matthew Dunn, associate managing director in the Cyber Risk practice of Kroll, a risk consulting firm, wrote a whitepaper titled “Growing Cyber Threats Against Cannabis Retailers.” In his work, Dunn outlines the spectrum of digital breaches that could cause significant damage to a dispensary business—and how that business’s team can work together to create a culture that guards against such threats.

“It's a good opportunity for a new industry, really to not only think about the physical security of getting a business stood up, but to think about the cyber risks that are out there as well,” Dunn says. “Cyber risks are one of the biggest threats that we see for any type of business today, but especially for new businesses and a new industry—cyber criminals will try to attack any vulnerabilities that they see. [They know] that there's a fair amount of valuable data that cannabis dispensaries would have on their networks that could be monetized on the dark web.”

Read Dunn’s work on cyber security here.

Those cyber risks can take many forms: email “phishing” scams, ransomware attacks, interception of video surveillance (and “the internet of things,” as Dunn points out), cashless point-of-sale breaches, cannabis marketing data theft. These problems can affect any business, but the particular vulnerabilities of a new industry like cannabis (and one that does not have access to traditional banking services) mean that dispensary owners and employees must take proactive measures.

Even beyond the obvious financial concerns for your business’s customers, Dunn points out that there’s still a sort of stigma surrounding the cannabis industry. Customers and patients may not want it to be publicly known that they’re purchasing cannabis products; a breach of that privacy could, in some cases, do reputational damage to your customer base.

“Cyber criminals know that if they can get access to the names on those [dispensary customer] databases, it's ripe for extortion—to try to go ahead and say, well, ‘We'll out you, unless you provide us with payment,’” Dunn says. “It's similar to other type of extortion scams that we've seen in the past. When I was in the FBI, we used to see a lot of extortion-type crimes. And this is really no different. It's just criminals taking advantage of the situation.”

For businesses, there’s certainly the immediate cost of remedying a cyber security breach. And there’s the lost time spent managing the breach and managing the reputational fallout.

“We've seen in the past, with retailers that have been hit or even private companies that have been hit with data breach situations, that customers are going to be leery about going back and trusting those entities with maintaining their sensitive personal information,” Dunn says, “because they've proven that they cannot protect it. Especially today, the bad guys can take that type of information and utilize it to commit so many other different types of fraudulent activities.”

He points to three pillars of defense against cyber security breaches: people, policies and technology.

“The human element is the weak link in the cyber security chain,” Dunn says. “And the bad guys know that. They're going to target the individuals behind the keyboards. So, [while] understanding that your employees are your primary attack vector, they'll also be your first line of defense.”

It’s important to include any digital training in your business’s onboarding process. When getting new employees acclimated to a company culture, it’s an ideal opportunity to convey two-factor identification password policies, rules for personal devices, certain levels of security clearance within the business. In this way, employees are brought into a more tightly knit professional environment.

The same process extends to any third-party vendor networks. Employees dealing with finances and point-of-sale systems must understand the importance of encryption. Customers are providing sensitive data with each purchase; it’s the responsibility of the cannabis dispensary staff to ensure that such data is protected. A virtual private network (VPN) is a great idea for internal business management and external communications with, say, cashless payment processors.

“You have to understand that you are being targeted every single day,” Dunn says. “It doesn't matter what type of business you’re in [or] whether you're an individual or small-, medium- or large-sized company. Everyone is being targeted today, just because the information that has been stored electronically is worth so much money on the dark web to other criminals.”

Education, he reiterates, is the first step in a business’s defense against those crimes.