TORONTO--(BUSINESS WIRE)--PRESS RELEASE--Terrace Global Inc. has announced it has entered into an equity line and profit-sharing agreement with The Flowr Corporation for the purpose of jointly developing an outdoor medical cannabis project in Portugal. Under the terms of the agreement, Terrace Global will fund certain operations and certain capital expenditures relating to the project in exchange for the issuance of: (1) common shares of Flowr at the volume weighted average trading price of the shares on the day prior to such subscription less the maximum applicable discount available under the TSX Venture Exchange subject to a minimum price of $0.52 per share; and (2) warrants at an exercise price equal to the greater of $0.76 and the minimum exercise price permitted under the TSXV rules. In addition, the parties have agreed to divide the net proceeds from the Project on a 75% basis for Flowr and 25% basis for the company, with an adjustment to 20% for the company in certain circumstances. As part of the agreement, a Technical Committee comprised of two representatives from the company and two representatives from Flowr will oversee the project. The company also has a renewal option to cultivate at the Aljustrel site during the 2021 season at its sole discretion in exchange for a 50% split of net proceeds from the sale of any medical cannabis derived from that season’s operations.
In March 2020, Flowr received GMP (Good Manufacturing Certification) certification in accordance with European Union standards, for its manufacturing facility in Sintra, Portugal. The GMP certification was issued by INFARMED, I.P., the Portuguese National Authority of Medicines and Health Products. This GMP certification allows the facility to manufacture and export GMP-certified finished medical cannabis products, specifically dried flower (Part I and II), from Portugal to international markets with legal medical cannabis regulations. The Sintra facility is located just outside of Lisbon.
“In light of the recent market upheaval, Terrace Global has been approached by several parties looking to access our operational expertise in outdoor cultivation and our ability to fund large-scale projects. The partnership with Flowr positions us well to focus on low-cost outdoor cultivation within the European Union at a time when there are still limited competitors,” commented Francisco Ortiz von Bismarck, chief executive officer of the company. “We are very excited to have Flowr as our outdoor medical cannabis cultivation partner. Flowr is comprised of a team of cannabis experts with extensive knowledge in the cultivation, manufacturing and processing of medical cannabis. In 2020, Flowr obtained GMP (Part I and II) from INFARMED at its production facility in Sintra, Portugal. We expect to be able to leverage Flowr’s operations and expertise, which will result in a very significant win for the company and its partners.”
The transactions contemplated by the agreement are subject to the approval of the TSXV.
The shares and warrants acquired by Terrace Global will be held only for investment purposes. Terrace Global may from time to time in the future increase or decrease its ownership, control or direction over securities of Flowr, through market transactions, private agreements or otherwise.