Aleafia and Serruya Private Equity Reach Agreement for National Retail Dispensary, top Performing Brands and $10M Investment
November 21 2018 - 6:00AM
Transactions Positions Aleafia as Major
Supplier, Retailer of Adult-use Cannabis
Aleafia Health Inc. (TSXV: ALEF; OTCQX: ALEAF, FRA: ARAH)
(“Aleafia“ or the “Company“), and Serruya Private Equity (“Serruya”
and together with the Company, the “Parties”), have settled final
forms of definitive joint venture and other agreements that will
see the Parties launch a Canada-wide cannabis retail Joint Venture
(“Retail JV”) along with a domestic and international cannabis
brands Joint-Venture (“Brands JV”, and together with the Retail JV,
the “Joint Venture”). Serruya will also make a $10 million
strategic investment in Aleafia via a non-brokered private
placement financing (“Private Placement”) and Aleafia will invest
$5 million of such gross proceeds of the Private Placement into the
Joint Venture.
The Brands JV will conduct business under the
name “Flying High Brands Inc.” with Aleafia owning fifty-one
percent (51%) and Serruya owning forty-nine percent (49%). The
Joint Venture enables multiple income streams throughout the value
chain, with Aleafia’s cultivation producing cannabis for
processing, extraction, packaging and eventual listing in retail
locations and with provincial distributors.
Additional Highlights:
- Backed and supported with a $10
million investment by Serruya and its affiliate, International
Franchise Inc., which has over 4500 quick service restaurant
locations in over 50 countries
- Serruya has also been a leading
early cannabis industry force as cannabis industry investors in
both emerging and established issuers and other industry
participants
- Launch approximately 20 proposed
retail outlets, with a subsequent national and international
expansion plan (excluding the U.S.)
- With turn-key store launch,
licensing agreements cover established, commercially proven
international cannabis brands
- Ready-made store design and retail
systems in place, along with intellectual property including
genetics and packaging
“We greatly look forward to working closely with
Aleafia’s strong management team. Together we will build and scale
a retail cannabis chain with immediate national reach and global
expansion plans,” said Aaron Serruya, a principal of SPE. “We are
very excited to once again play an early role in developing one of
the world’s largest cannabis companies.”
“Aleafia is now well positioned to produce
commercially proven international cannabis brands for our national
cannabis retail network along with provincial distributors,” said
Aleafia Chief Executive Officer Geoffrey Benic. “In launching
adult-use cannabis operations, we will greatly benefit from working
with and receiving Serruya’s substantial financial backing. These
transactions will see Aleafia immediately assume a leadership role
in adult-use cannabis production, supply and retailing,
complementing our proven medical cannabis operations.”
Strategic Investment:
Serruya will also make a strategic investment in
Aleafia through a $10 million non-brokered private placement and in
return acquire 5 million common shares in Aleafia at a price of
$2.00 per share.
The Retail JV will conduct business under the
name “One Plant (Retail) Corp.” with Aleafia owning 9.9 percent and
Serruya owning 90.1 percent. Aleafia will have the right of first
refusal to increase ownership in the Retail JV up to 49 percent,
subject to compliance with applicable provincial regulations at all
material times. Aleafia will purchase its 51 percent stake in the
Brands JV company by way of an issuance from treasury and the
issuance of 6 million common shares in Aleafia to Serruya.
The transactions are subject to customary
closing conditions, including receipt of final approvals of the TSX
Venture Exchange.
For Investor & Media Relations,
please contact:
Nicholas Bergamini, VP, Public Affairs
IR@AleafiaInc.com
About Aleafia Health Inc.:
Aleafia is a vertically integrated, national
cannabis company with major medical clinic, cannabis cultivation
and R&D operations. The company is a federally licensed
producer and vendor of cannabis and will reach an annual production
capacity of 98,000 kg of dried cannabis in 2019.
Aleafia operates 22 medical cannabis clinics
staffed by physicians and nurse practitioners, with over 50,000
patients. The company is highly differentiated, maintaining the
largest medical cannabis dataset in the world with significant
intellectual property holdings and current R&D operations.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the 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.
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