In­vestors keen on im­mi­nent fed­eral pot-li­cence deal

Lib­erty Leaf ac­quires ma­jor­ity in­ter­est in Just Kush

Stockwatch Daily - - FRONT PAGE - Mr. Will Ras­can re­ports

LIB­ERTY LEAF Hold­ings Ltd. has ac­quired a ma­jor­ity in­ter­est in Just Kush En­ter­prises, a com­pany in the fi­nal stages of ob­tain­ing an Ac­cess to Cannabis for Med­i­cal Pur­poses Reg­u­la­tions (ACMPR) li­cence. As well, Just Kush owns com­plete con­trol over a cur­rent Med­i­cal Mar­i­juana Ac­cess Reg­u­la­tions (MMAR)-li­censed pro­duc­tion fa­cil­ity.

This ac­qui­si­tion com­ple­ments Lib­erty Leaf’s pur­chase

last year of North Road Ven­tures, a com­pany fo­cused on the value-added side of the cannabis prod­uct pro­ces s ing business, sales and com­ple­men­tary dis­tri­bu­tion. Since North Road also has a late-stage ACMPR li­cence ap­pli­ca­tion, Lib­erty Leaf po­ten­tially has two li­cences to pro­duce and dis­trib­ute cannabis prod­ucts for both medic­i­nal and re­cre­ational use across Canada when cannabis is ex­pected to be le­gal­ized in July, 2018.

Ac­quir­ing Just Kush fits Lib­erty Leaf’s di­ver­si­fied-port­fo­lio strat­egy

“Ac­quir­ing an op­er­a­tion like Just Kush has al­ways been a part of our strat­egy to build a di­ver­si­fied port­fo­lio in the cannabis sec­tor,” says Lib­erty Leaf chief ex­ec­u­tive of­fi­cer, Wil­liam Ras­can. “Our goal is to cover all the bases — from re­search­ing and cul­ti­vat­ing cannabis strains, to pro­duc­ing, pack­ag­ing and dis­tribut­ing dried prod­uct and ex­tracts. Just Kush aligns per­fectly with our plan to op­er­ate an in­te­grated, end-to-end cannabis pro­duc­tion and sup­ply-chain business.”

As noted, an­other key rea­son Just Kush is a valu­able ac­qui­si­tion is that it al­ready con­trols an ac­tive fa­cil­ity — a five-room, in­door grow op­er­a­tion on a 13-acre land base. The fa­cil­ity is cur­rently cul­ti­vat­ing medic­i­nal cannabis un­der its MMAR li­cence.

The Just Kush-con­trolled fa­cil­ity also has a Health Canada-man­dated, level seven se­cu­rity vault that per­mits stor­ing up to $1.25-mil­lion worth of prod­uct at any one time.

High level of ex­per­tise adds up to the perfect fit with Lib­erty Leaf

“With over eight years’ ex­pe­ri­ence grow­ing and sup­ply­ing med­i­cal mar­i­juana to com­pas­sion clubs and their pa­tients, and over 40 years’ com­bined ex­pe­ri­ence in breed­ing and grow­ing cannabis, the Just Kush team brings a high level of ex­per­tise in cul­ti­va­tion to Lib­erty Leaf. They are a great fit for us,” says Mr. Ras­can.

Dr. Robert Jack­man, qual­ity as­sur­ance man­ager of Just Kush, ex­plains, “We are like a craft brew­ery, pro­duc­ing spe­cialty blends that are prized for their con­sis­tent qual­ity.”

“Lib­erty Leaf is the perfect part­ner for us. It has both the man­age­ment ex­per­tise and fi­nan­cial re­sources to help us im­me­di­ately ex­pand our rare 13-acre land-base op­er­a­tion, build our brand and mar­ket our prod­ucts to medic­i­nal and re­cre­ational buy­ers,” added Dr. Jack­man.

Terms of the deal

Un­der the terms of the share pur­chase agree­ment, Lib­erty Leaf may ac­quire such amount of shares rep­re­sent­ing a 60-per-cent in­ter­est in Just Kush by pay­ing $150,000 and is­su­ing an ag­gre­gate of six mil­lion com­mon shares in the cap­i­tal of the com­pany upon clos­ing, of which three mil­lion shall be held in es­crow and re­leased upon Just Kush ob­tain­ing certain mile­stones pur­suant to the ACMPR ap­pli­ca­tion.

In con­sid­er­a­tion for or­ga­niz­ing the SPA, the com­pany shall is­sue an arm’s-length party the lesser of: a) 10 per cent of the to­tal is­sued and out­stand­ing com­mon shares of the com­pany as of the date of ex­e­cu­tion of the SPA or b) one mil­lion com­mon shares of the com­pany. All se­cu­ri­ties is­sued pur­suant to the SPA shall bear a four-month-and- one-day hold pe­riod.

Lib­erty Leaf plans im­me­di­ate en­hance­ment of Just Kush

The first or­der of business is to get Lib­erty Leaf’s man­age­ment and le­gal teams work­ing to sub­mit an abridge­ment to Just Kush’s ACMPR li­cence ap­pli­ca­tion. The re­vi­sion will seek to add man­u­fac­tur­ing and dis­tribut­ing cannabis oils and ex­tracts to Just Kush’s li­cence. The re­vi­sion will also aim to in­crease Just Kush’s vault ca­pac­ity to level eight, giv­ing the com­pany five times the stor­age of its ex­ist­ing vault — up to $6.25-mil­lion worth of prod­uct at any given time.

Mr. Ras­can notes, “With two li­cences in play, an ex­ist­ing grow fa­cil­ity with an as­sured sup­ply of cannabis, and the means to dis­trib­ute Canada-wide, Lib­erty Leaf is now well-po­si­tioned to profit from the com­ing le­gal­iza­tion of cannabis.”

About Lib­erty Leaf Hold­ings Ltd.

Lib­erty Leaf Hold­ings is a new, Cana­dian-based pub­lic com­pany whose fo­cus is to build and sup­port a di­ver­si­fied port­fo­lio of cannabis-sec­tor busi­nesses, in­clud­ing cul­ti­va­tion, pro­cess­ing, value-added CBD/THC pet prod­ucts, and sup­ply-chain prod­ucts within this dy­namic and fast-grow­ing sec­tor.

Lib­erty Leaf also owns 100 per cent of North Road Ven­tures, a late-stage ap­pli­cant un­der Health Canada’s Ac­cess to Cannabis for Med­i­cal Pur­poses Reg­u­la­tions.

We seek Safe Har­bor.

Keith Franklin Jr An­der­son, Steven Feld­man, Wil­liam Ras­can

(LIB) Shares: 94,918,605

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