- Blissco to complement Supreme Cannabis growing brand portfolio
and accelerate its growth as a premium wellness-focused cannabis
company.
- Share-based acquisition allows Blissco shareholders to continue
to participate in upside of combined companies, and benefit from
enhanced liquidity and access to capital.
- Supreme Cannabis has secured support from shareholders of
Blissco representing approximately 52%, including CEO Damian Kettlewell.
- Acquisition valued at approximately C$48
million.
TORONTO, May 16, 2019 /CNW/ - The Supreme Cannabis
Company, Inc. ("Supreme Cannabis") (TSX: FIRE) (OTCQX: SPRWF) (FRA:
53S1) and Blissco Cannabis Corp. ("Blissco") (CSE: BLIS)
(OTCQB: HSTRF) (FRA: GQ4B:GR) are pleased to announce that they
have entered into a definitive arrangement agreement (the
"Arrangement Agreement") under which Supreme Cannabis will acquire,
by way of a court-approved plan of arrangement under the
Business Corporations Act (British
Columbia) (the "Arrangement"), all of the issued and
outstanding common shares of Blissco (the "Blissco Shares") not
already owned by Supreme Cannabis. The Arrangement is an all-stock
transaction with a total value of approximately C$48 million.
"Supreme Cannabis is the best positioned company in the cannabis
space to help Blissco achieve its ambition of delivering
innovative, quality assured full-spectrum cannabis products to the
world," said Damian Kettlewell, CEO
of Blissco. "By merging with Supreme Cannabis, Blissco shareholders
will benefit from the combined expertise of both companies in
growing premium cannabis brands, producing and procuring
high-quality inputs, commercializing new products, and ensuring
regulatory compliance. Blissco shareholders will also benefit from
Supreme Cannabis' enhanced trading liquidity on the TSX and greater
access to capital that will allow us to focus and accelerate
Blissco's premium wellness business."
"Blissco has built a distinct and authentic premium wellness
brand. Through our strategic partnership and prior investment in
the company, we developed a deep understanding of the business and
a high level of confidence in the senior management team. This
transaction will allow Blissco to focus its business around the
production and commercialization of cannabis oils and topicals for
the premium wellness consumer," said Navdeep Dhaliwal, CEO of Supreme Cannabis.
"Blissco shares our vision, mission, and values. Through this
transaction, we will combine best-in-class processes,
commercialization, marketing and brand building expertise, and
skilled management, ensuring we continue to achieve our vision to
improve global well-being with cannabis."
Transaction Highlights.
Share-based offer to enable upside
participation.
Under the terms of the Arrangement Agreement, Supreme Cannabis will
acquire all of the issued and outstanding Blissco Shares not
already owned by Supreme Cannabis, representing a total value of
approximately $48 million. Each
Blissco Share will be exchanged for 0.24 of a common share of
Supreme Cannabis (the "Supreme Cannabis Shares"). Shareholders of
both companies will benefit from the combined companies' expanded
product offerings, infrastructure and consumer reach. Through the
acquisition, Blissco will join Supreme Cannabis' exclusive
portfolio of premium brands and operate as Supreme Cannabis' health
and wellness business.
Expands Canada's only
premium-focused brand portfolio.
Blissco's established
premium wellness brand provides a platform from which the combined
company will launch new products for this growing consumer segment.
Through the acquisition of Blissco, Supreme Cannabis cements its
position as Canada's only premium
cannabis company producing at scale.
Provides advanced extraction capabilities.
Based in
Langley, BC, Blissco operates a
18,000 square foot production facility with advanced extraction
capabilities. Blissco has completed phase 1 of construction of its
state-of-the-art cannabis oil extraction lab. Blissco has been
producing cannabis oils since receiving its production license in
August 2018.
United and committed leadership team.
Upon closing the Arrangement, Blissco's CEO, Damian Kettlewell will continue to lead Blissco
while benefiting from Supreme Cannabis' expertise, infrastructure
and access to capital. Mr. Kettlewell has committed to remaining
employed at Supreme Cannabis as well as retaining at least 75% of
his shares for a minimum of two years.
Board Approvals.
The Arrangement was unanimously
approved by both companies' boards of directors, and by a special
committee of independent directors of Blissco (the "Special
Committee"). Deloitte LLP ("Deloitte") acted as an independent
financial advisor to the Special Committee and has provided a
verbal opinion to the Special Committee that, as of the date of
such opinion, and subject to the assumptions, limitations and
qualifications on which such opinion is based, the consideration to
be received by Blissco shareholders pursuant to the Arrangement is
fair, from a financial point of view, to such shareholders, other
than Supreme Cannabis. The board of directors of Blissco
unanimously recommends that Blissco shareholders vote in favour of
the resolution to approve the Arrangement.
Voting support agreements and conditions to close.
The
Arrangement will require approval: (i) by 66 ⅔% of the votes cast
by Blissco shareholders represented in person or by proxy at a
special shareholders meeting (the "Meeting") called to consider the
Arrangement, and (ii) by a majority of the votes cast by Blissco
shareholders represented in person or by proxy at the Meeting,
after excluding the votes cast by persons whose votes are to be
excluded pursuant to Multilateral Instrument 61-101 – Protection
of Minority Security Holders. Closing of the Arrangement is
also subject to the approval of the Supreme Court of British Columbia, the conditional approval of
the TSX to listing the Supreme Cannabis Shares to be issued in
connection with the Arrangement, receipt of required regulatory
approvals, and other customary conditions of closing.
Supreme Cannabis has secured irrevocable hard lock-ups (the
"Lock-Ups") from shareholders of Blissco representing approximately
52% of the outstanding Blissco shareholders, including
Damian Kettlewell, CEO of Blissco,
to vote in favour of the Arrangement, and also currently owns
approximately 10% of the outstanding Blissco Shares.
Other Information.
A description of the Arrangement Agreement will be set forth in
a management information circular (the "Circular"), which will be
filed with the Canadian securities regulators on the System for
Electronic Document Analysis and Retrieval ("SEDAR") at
www.sedar.com, as well as in Blissco's material change report to be
filed on SEDAR. A copy of the Arrangement Agreement will also
be filed by Blissco with the Canadian securities regulators and
will be available for viewing at www.sedar.com.
Norton Rose Fulbright Canada LLP acted as legal counsel to
Supreme Cannabis. Deloitte LLP acted as the financial advisor
to Blissco's Special Committee, and provided a fairness opinion to
the Special Committee, while Alexander
Holburn Beaudin + Lang LLP acted as legal counsel to
Blissco.
All dollars represented are in Canadian unless otherwise
noted.
About Blissco Cannabis Corp.
Blissco Cannabis Corp. (CSE: BLIS) (OTCQB: HSTRF) (FRA: GQ4B) is
a Canadian wellness cannabis brand based in British Columbia and a multi-licensed
processor, cultivator, and distributor of premium cannabis. Blissco
owns and operates an 18,000 square foot, state-of-the-art
extraction, processing and cultivation facility located in Metro
Vancouver, British Columbia.
Blissco is supplying premium cannabis and Reserve whole flower and
dried flower pre-rolls to the Canadian market with supply
agreements in British Columbia,
Alberta, Saskatchewan, and New Brunswick. In support of Blissco's global
distribution strategy, the company has initiated its EU GMP
certification process and has completed its first inspection by
German authorities. Learn more at Blissco.com.
About The Supreme Cannabis Company, Inc.
The Supreme Cannabis Company, Inc. is a global diversified
portfolio of distinct cannabis companies, products and brands.
Since 2014, the Company has emerged as one of the world's
fastest-growing, premium plant driven-lifestyle companies by
effectively deploying capital, with an emphasis on disciplined
growth and high-quality products.
Supreme Cannabis' portfolio includes 7ACRES, its wholly-owned
subsidiary and multi-award-winning brand; Cambium Plant Sciences, a
plant genetics and cultivation IP company; Medigrow Lesotho, a
cannabis oil producer located in southern Africa; and a brand partnership and licensing
deal with Khalifa Kush Enterprises Canada.
Supreme trades as FIRE on the Toronto Stock Exchange (TSX:
FIRE), SPRWF on the OTC Exchange in the
United States (OTCQX: SPRWF) and 53S1 on the Frankfurt Stock
Exchange (FRA: 53S1). Follow us on Instagram, Twitter,
Facebook and YouTube.
We simply grow better.
Forward-Looking Information.
Certain statements made in this press release may constitute
forward-looking information under applicable securities laws. These
statements may relate to anticipated events or results and include,
but are not limited to: statements regarding the expected benefits
to result from the Arrangement; the effect of the Arrangement on
both companies going forward; the timing for the mailing of the
Circular and holding the Meeting; and the satisfaction of closing
conditions including, without limitation (i) the required Blissco
shareholder approval; (ii) necessary court approval in connection
with the Arrangement; (iii) certain termination rights available to
the parties under the Arrangement Agreement; (iv) Supreme Cannabis
obtaining the necessary approvals from the TSX for listing the
Supreme Shares to be issued in connection with the Arrangement; and
(v) receipt of required regulatory approvals and other customary
closing conditions. Often, but not always, forward-looking
statements can be identified by the use of forward-looking
terminology such as "may", "will", "expect", "believe", "estimate",
"plan", "could", "should", "would", "outlook", "forecast",
"anticipate", "foresee", "continue" or the negative of these terms
or variations of them or similar terminology. Forward-looking
statements are current as of the date they are made and are based
on applicable estimates and assumptions made by management of
Blissco and Supreme at the relevant time in light of their
experience and perception of historical trends, current conditions
and expected future developments, as well as other factors that
they believe are appropriate and reasonable in the circumstances.
However, neither Blissco nor Supreme Cannabis undertakes to update
any such forward-looking information whether as a result of new
information, future events or otherwise, except as required under
applicable securities laws in Canada. There can be no assurance that such
estimates and assumptions will prove to be correct.
Many factors could cause actual results, level of activity,
performance or achievements or future events or developments to
differ materially from those expressed or implied by the
forward-looking statements, including, without limitation, the risk
that the Arrangement does not occur; negative effects from the
pendency of the Arrangement; the ability to realize expected
benefits from the Arrangement; the timing to consummate the
Arrangement; public opinion; and any other risk factors discussed
in any public filings of Supreme Cannabis and Blissco filed with
the Canadian securities regulators, including the "Risk Factors"
section of Supreme Cannabis' Annual Information Form dated
October 2, 2018 ("AIF"). A copy of
the AIF and Supreme Cannabis' other publicly filed documents can be
accessed under Supreme Cannabis' profile on SEDAR at
www.sedar.com. Supreme Cannabis and Blissco caution that the
foregoing list of risk factors and uncertainties is not exhaustive
and other factors could also adversely affect their results.
Readers are urged to consider the risks, uncertainties and
assumptions carefully in evaluating the forward-looking information
and are cautioned not to place undue reliance on such
information.
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SOURCE The Supreme Cannabis Company, Inc.