VANCOUVER, March 12, 2019 - PRESS RELEASE - CannAmerica Brands Corp. has announced that it has entered into a binding letter of intent (LOI) to create a joint venture with Sericea Labs S.A. de C.V. (SERICEA) and CBDistribution Company Ltd. (CBDC) with the intention of building a facility in Mexico for importing and warehousing licensed CBD products as well as CBD oils and tinctures destined for refining.
When and if permitted under Mexican laws, the company, SERICEA and CBDC also plan on acquiring, importing and cultivating industrial hemp biomass for extraction into CBD isolate to be used for multiple product lines which utilize CBD.
Subject to board approval from the company and completion of satisfactory due diligence, the JV Parties intend to enter into a definitive joint venture agreement on or before April 30, 2019. Under the LOI, it is anticipated that each of the JV Parties will receive the following portions of the shares in the JV in exchange for the contributions of each of the JV Parties as follows:
1. 40 percent to SERICEA in exchange for performing all necessary steps in obtaining the applicable licenses in Mexico represented in the joint venture for: (i) importing and warehousing licensed products (as well as CBD oils and tinctures) destined for refining; (ii) cultivation; and (iii) acquiring, importing and cultivating hemp biomass for extraction of CBD;
2. 40 percent to CANA in exchange for contributing operational expertise, sourcing the property, providing equipment for refining and extracting product, providing exclusive licenses for products destined to the Mexican market and establishing a written intellectual property licensing agreement of use exclusive to the JV for all current and future technology for oil extraction within the country of Mexico; and,
3. 20 percent to CBDC in exchange for sourcing of hemp biomass, branding, marketing and the sale of the finished product, including but not limited to CBD isolate in bulk.
Additionally, the company agrees to contribute the following on the date the joint venture receives its Single Cannabis Registry in Mexico:
- CANA agrees to issue to the shareholders of SERICEA such number of common shares in its share capital equal to CDN$2,000,000 at a per share price equal to the volume weighted average price of such shares on the Canadian Securities Exchange over a 15-day period ending on the day such Consideration Shares are required to be issued; and
- On the date the JV's cumulative gross sales of all hemp derived oil and other imported and licensed products exceeds USD$5,000,000, CANA agrees to issue to the shareholders of SERICEA such number of Consideration Shares equal to $2 million at a per share price equal to the 15-day VWAP.
"We are very pleased to enter the Latin American region with our partners in Mexico. This marks an exciting step for our brand's expansion in the international CBD marketplace," said Dan Anglin, CEO and co-founder of CannAmerica. "Coupled with our partnership in Europe, global distribution of CannAmerica products is our key focus in 2019."
"SERICEA Labs welcomes the opportunity to enter into this LOI that will help pave the way for CannAmerica CBD licensed products to enter into the emerging Mexican cannabis market, with the same quality and processing standards expected by their customers," expressed the Board of Directors of SERICEA Labs S.A. de C.V. in an authorized statement.
