Major Retail Operation Backed by Family behind
Iconic Yogen Früz, Second Cup Brands
Aleafia Health Inc. (
TSXV: ALEF; OTCQX: ALEAF, FRA:
ARAH) (“
Aleafia“) or (the
“
Company“), has entered into a letter of intent to
acquire a 51 per cent stake in One Plant™, an adult-use cannabis
retail operation led by members of the Serruya Family (the
“
Serruya Family”), including Aaron Serruya, the
president of International Franchise Inc., which has over 4500
franchise locations in over 50 countries. Serruya Family has also
been a leading force in the cannabis industry as early investors of
Aphria
(“TSX:APH”) and the majority shareholder of
Liberty Health Sciences (“
CNSX: LHS”). Together,
the two parties will form a joint venture (the
“
JV”).
The JV marks the first phase of a multiphase strategy that will
see Aleafia enter the adult use Cannabis industry and related
retail operations in Canada, joining Aleafia’s two existing
business pillars; cannabis cultivation and medical clinic
operations. Pending standard due diligence to be completed within
14 days, the execution of definitive agreements and regulatory
approvals, the acquisition provides Aleafia the tools to become one
of the largest national adult-use cannabis retailers.
JV Highlights:
- Backed and supported by Aaron Serruya, president of
International Franchise Inc. which has over 4500 quick service
restaurant locations in over 50 countries
- Initial launch to include over 20 retail locations in Ontario,
with a subsequent expansion plan across Canada
- Licensing agreements with established international cannabis
brands upon store launch
- Turn-key operation with ready-made store design and retail
systems in place
- Intellectual property including genetics and packaging
- Vertical integration, with Aleafia cultivation facilities
producing cannabis for processing, extraction, packaging and
eventual listing in retail locations
Under the terms of the LOI, Aleafia and Serruya Family will
establish a new corporation for the JV that will be owned 51% by
Aleafia and 49% by Serruya Family. Aleafia will purchase its 51%
stake in the JV company by way of the issuance of five million
Aleafia shares to the Serruya Family. Aleafia will also contribute
to the JV $5 million in cash and cannabis product on industry
standard wholesale pricing, among other contributions. Complete
details of the JV will be outlined in a definitive shareholders
agreement to be entered into between Aleafia and Serruya
Family.
The board of directors of the new JV company will consist of two
(2) nominees of Aleafia, two (2) nominees of Serruya Family and one
(1) independent, and the management team of the JV company will be
determined jointly by Aleafia and Serruya Family.
Private Placement
In addition, Aleafia is pleased to announce that The Serruya
Family will complete a strategic investment through a non-brokered
private placement of $10,000,000 in Aleafia common shares at a
price of $3.10 per share. Closing of the private placement is
expected to occur on about October 15, 2018, subject to definitive
agreements and TSX Venture Exchange acceptance, among other
conditions. “This joint venture positions Aleafia to capture
significant national market share in the retail adult-use cannabis
market in Canada. The Serruya family are excellent retail
entrepreneurs with a proven track record in quickly scaling their
businesses to global proportions,” said Aleafia CEO Geoffrey Benic.
“Our team is very excited to work with the Serruya family to
achieve the same result in the global adult-use cannabis
market.”
“The Serruya family is pleased to joint venture with Aleafia’s
strong management team in building and scaling a retail cannabis
chain with immediate national reach and global expansion plans,”
said Aaron Serruya, managing director of Serruya Private Equity.
“We are excited to once again play an early role in building one of
the world’s largest cannabis companies.” About Aaron
Serruya:
Aaron Serruya began his career at age nineteen as the other
co-founder of Yogen Früz®. Aaron was also involved at various
levels, in Coolbrands® and Kahala Brands®. Having over three
decades of experience in the retail franchising sector, in addition
to his position as a Managing Director at SPE, Aaron is currently
the President of International Franchise Inc. (home of global
brands such as Yogen Früz®, Pinkberry® and Swensen’s® Ice Cream),
which has over 4,500 quick service restaurants worldwide, in over
50 countries. He has also been a leading force in the cannabis
industry, as an early investor in one of the largest global
cannabis companies and the current majority owner of Liberty Health
Sciences.
Aaron is a major investor in Second Cup, where he and his
brother Michael sit on the board of directors.
About Aleafia Health Inc.: Aleafia is a
leading, vertically integrated cannabis company with major cannabis
cultivation & processing and medical cannabis clinics business
operations. Aleafia owns two cannabis cultivation facilities, one
of which is licensed and fully operational and one which will be
fully operational in late 2018. Aleafia will reach a fully-funded
annual growing capacity of 38,000 kg in 2019. Canabo Medical
Clinics are the largest brick and mortar medical cannabis clinic
network in Canada with 22 locations and over 50,000 patients.
For Investor & Media Relations, please
contact: Nicholas Bergamini, VP, Public Affairs
IR@AleafiaInc.com
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
FORWARD LOOKING INFORMATION
This press release contains forward-looking statements and
information that are based on the beliefs of management and reflect
the Company's current expectations. When used in this press
release, the words "estimate", "project", "belief", "anticipate",
"intend", "expect", "plan", "predict", "may" or "should" and the
negative of these words or such variations thereon or comparable
terminology are intended to identify forward-looking statements and
information. The forward-looking statements and information
in this press release includes information relating to the
implementation of Aleafia Health's business plan. Such
statements and information reflect the current view of the Company
with respect to risks and uncertainties that may cause actual
results to differ materially from those contemplated in those
forward-looking statements and information.
By their nature, forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause our
actual results, performance or achievements, or other future
events, to be materially different from any future results,
performance or achievements expressed or implied by such
forward-looking statements. Such factors include, among
others, the following risks: risks associated with the
implementation of Aleafia Health's business plan and matters
relating thereto, risks associated with the cannabis industry,
competition, regulatory change, the need for additional financing,
reliance on key personnel, the potential for conflicts of interest
among certain officers or directors, and the volatility of the
Company's common share price and volume. Forward-looking
statements are made based on management's beliefs, estimates and
opinions on the date that statements are made and the Company
undertakes no obligation to update forward-looking statements if
these beliefs, estimates and opinions or other circumstances should
change. Investors are cautioned against attributing undue
certainty to forward-looking statements.
A photo accompanying this announcement is available at
http://www.globenewswire.com/NewsRoom/AttachmentNg/d1ee1804-873b-4c71-adc3-9307b32579a0