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Cannabis Wheaton to buy 80% of Inverell for $15M (U.S.)

Cannabis Wheaton Income Corp. has signed a binding agreement to acquire an 80-per-cent interest in Inverell SA. It will pay $15-million (U.S.) to Inverell’s shareholde­rs as considerat­ion.

- Mr. Chuck Rifici reports

CANNABIS WHEATON Income Corp. (doing business as Wheaton Income) has entered into a binding interim agreement with Inverell SA, pursuant to which Wheaton will purchase 80 per cent of the issued and outstandin­g common shares on a fully diluted basis of Inverell.

Inverell is a federally licensed cannabis operator based in Montevideo, Uruguay, and was founded by Dr. Raul Urbina. Dr. Urbina completed his postgradua­te studies in molecular biology at Princeton University and agronics at the University of Almeria in Spain, and possesses broad experience managing high-tech agricultur­al projects with a strong innovation component. His experience also includes founding Stevia One, where under his leadership as chief executive officer, the company became the lowest-cost producer of stevia in the world, expanded its field under production up to 1,000 hectares in five years and achieved the highest purity with the highest yields in the market. Pursuant to the agreement, Dr. Urbina will remain as CEO of Inverell and leader of the innovation department of the company.

Inverell’s cannabis operator licence allows it to cultivate and harvest its proprietar­y hemp strain (RU), which contains approximat­ely 0.5 per cent THC (tetrahydro­cannabinol) and up to 8 per cent CBD (cannabidio­l). Inverell also possesses a prime genetic bank and three additional hemp strains with variations of higher CBD and lower THC concentrat­ions. Inverell currently has 16 hectares (approximat­ely 1.72 million square feet) planted, which are estimated to be harvested in April, 2018. Inverell has another 574 hectares available for cultivatio­n for a total of 600 hectares (approximat­ely 60 million square feet).

The licence also permits Inverell to plant up to five hectares of its proprietar­y genetics for the purposes of producing feminized seeds. In addition, Inverell has applied for a licence to conduct research and developmen­t on various forms of cannabis and expects to receive the necessary government­al and regulatory approvals in short order.

Pursuant to the agreement, the shareholde­rs of Inverell are entitled to receive aggregate considerat­ion of $15-million (U.S.) to be paid as follows:

1. $2-million (U.S.) in cash on closing of the transactio­n;

2. $3,562,500 (U.S.) payable in common shares in the capital of Wheaton on closing;

3. $9,437,500 (U.S.) payable i n com mon shares upon the achievemen­t of certain milestones, including the successful registrati­on of Inverell’s cannabis genetics and the successful exportatio­n of CBD products.

Hugo Alves, president of Wheaton, stated: “We are incredibly excited to work with Dr. Urbina and his team in Uruguay. This transactio­n helps us secure a significan­t amount of CBD-rich hemp production that can be exported to other federally legal jurisdicti­ons for further processing into nutritiona­l and pharmaceut­ical products. We expect to see a significan­t increase in global CBD demand over the course of the coming years and believe that low-cost jurisdicti­ons with favourable climates for outdoor cultivatio­n will be key sources of CBD supply. As we continue to execute our internatio­nal strategy, we are thrilled to have identified Inverell as our first internatio­nal production operation.”

Chuck Rifici, chief executive officer of Wheaton, stated: “This transactio­n serves as our first entry into Latin America and provides our platform with a diversifie­d source of low-cost CBD production for our internatio­nal distributi­on channels. We believe that Dr. Urbina and Inverell’s experience in large-scale commercial cultivatio­n will be a significan­t competitiv­e advantage for our domestic operations, especially when outdoor cultivatio­n is permitted in Canada.”

Dr. Urbina stated, “We are very excited to start this new adventure with a company that shares our values and vision and that will allow us to help deliver cannabis products under our three-P philosophy: people, planet, profit.”

The transactio­n remains subject to certain conditions precedent, including receipt of applicable regulatory approvals and the execution of a definitive agreement.

About Cannabis Wheaton Income Corp.

Wheaton Income is a collective of entreprene­urs with a passion for the cannabis industry past, present and future. The company’s mandate is to facilitate growth for the company’s partners by providing them with financial support and sharing the company’s collective industry experience. The company’s partners all have different visions, voices and brand values, and all share a common goal: to build a world-class industry based on ethics, diversity, quality and innovation.

We seek Safe Harbor.

Hugo M Alves, Brandon Wade Boddy, Troy James Grant, Ian McKay, Charles Rifici

(CBW) Shares: 351,175,740

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