TORONTO, July 17, 2019 /CNW/ - PRESS RELEASE - SOL Global Investments Corp. has announced a US$6.5 million capital infusion in its portfolio company CannCure Investments Inc., an investment that is intended to fuel the growth of its position throughout the cannabis markets of Florida, Michigan and California. CannCure is a majority-owned subsidiary of SOL Global that indirectly holds 100 percent of 3 Boys Farms, LLC, a Florida limited liability company with a Florida state license to cultivate, process and dispense medical marijuana and other diversified cannabis assets in various stages of investment.
CannCure will utilize the SOL investment to progress the binding agreements it has in place towards closing to acquire: (a) 100 percent of MCP Wellness, which owns the rights to two Michigan cannabis cultivation licenses, a Michigan cannabis processing license and three fully licensed cannabis provisioning centers in Michigan (with a fourth provisioning center scheduled to open in Ann Arbor in July 2019), and nine additional municipally-approved provisioning centers that are under development; (b) 100 percent of Northern Emeralds, the preeminent cannabis cultivator based in Humboldt County, Calif., that is one of the leading cannabis flower cultivators in California, boasting award-winning premium flower strains such as "Titan OG", "Sapphire Cush" and "Durban Poison"; and (c) 100 percent of Three Habitat Holdings, which owns and operates One Plant dispensaries in California. Canncure intends to combine these acquisitions into one multistate operator that will have robust operations in three of the top 10 state cannabis markets by revenue, with vertically integrated operations across all three states and approximately 46 retail locations in operation by the end of 2020.
As a result of the additional US$6,500,000 (CAD8,494,000) investment into CannCure, SOL Global's current ownership has increased to 97.8 percent. Upon CannCure's completion of its previously announced acquisitions in California and Michigan, as well as completing the payment of the USD$80,000,000 earn out the former owners of CannCure, as previously announced on April 1, 2019, SOL Global expects to own approximately 20.5 percent of the resulting business.
"SOL's US$6.5 million investment into CannCure is to continue strengthening our foundation and positioning the company as a leader in the dominant markets of Florida, Michigan and California," said Andy DeFrancesco, SOL Global's chairman and chief investment officer. "CannCure's expansion is an integral part of SOL Global's overall strategy and our goal to dominate all aspects of the legal cannabis, hemp and CBD markets here in North America and Europe."
While CannCure is majority-owned by SOL Global, the additional investment by SOL Global into CannCure was a "downstream transaction" under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions and, accordingly, was not subject to related party transaction requirements. In addition, the investment was part of a larger private offering of securities of CannCure in which other arm's length investors participated on the same terms and conditions as SOL Global.
SOL Global expects to provide a corporate update regarding its investment activity in the coming days.
