Halo Signs Definitive Agreement to Acquire Canmart
(firmenpresse) - https://www.irw-press.at/prcom/images/messages/2020/53676/Halo Signs CanMart Final RELEASE_PRCOM.001.jpeg
Figure 1: Canmart operates in a 30,000 square foot storage and distribution facility in Southeast England
This news release constitutes a designated news release for the purposes of the Companys prospectus supplement dated September 16, 2020 to its short form base shelf prospectus dated September 2, 2020.
Not for Distribution to U.S. Newswire Servicers or For Dissemination in the United States
All figures in CAD unless stated otherwise
Toronto, Ontario - October 2, 2020 - Halo Labs Inc. (Halo or the Company) (NEO: HALO, OTCQX: AGEEF, Germany: A9KN) has entered into a definitive share purchase agreement, (the Share Purchase Agreement) pursuant to which the Company, in exchange for up to 72,463,768 common shares of Halo (Halo Shares), will acquire all of the issued and outstanding shares of Canmart Ltd. (Canmart), a licensed importer and distributor of cannabis-based products for medicinal use (CBPMs) in the United Kingdom (UK) (the Acquisition). Issuance of certain Halo Shares will be subject to milestones and, once issued, will be subject to volume trading restrictions (see Transaction Overview below) .
UK Cannabis Market Overview
The UK population consumes one of the greatest amounts of cannabis per capita in the world. With an estimated 4.7 million cannabis users out of a total general population of 66.4 million in 2019, the number of users per capita even approaches California, currently the single largest cannabis market in the world. Prohibition Partners Report, December 2019. https://prohibitionpartners.com/reports/#the-uk-cannabis-report.
While the estimated number of people in the UK who use cannabis to treat chronic health conditions is only 1.4 million, https://www.forbes.com/sites/irisdorbian/2019/08/15/california-is-worlds-biggest-legal-pot-market-says-new-report/#736eaf074cd7)
the legal use of medical cannabis is still in its relative infancy. The UK legalized CPBMs, including plant materials, oils, tinctures, edibles and capsules, in November 2018.
Nearly all CPBM prescriptions are imported, because there is no formal domestic manufacturing program in the UK. GW Pharma has licensed pharmaceuticals made with cannabis that may be considered CPBMs
However, as legal prescriptions are on the rise, https://prohibitionpartners.com/reports/#the-uk-cannabis-report
recent regulations have sought to streamline and ease the importation of medical cannabis to the UK. In March 2020, the Medicines & Healthcare Products Regulatory Agency (the MHRA) and the Home Office implemented changes that enable Canmart to import large quantities of CPBMs and hold inventory of these approved medicines. The Companys research of publicly available information indicates that Canmart and four other companies in the UK currently possess all of the licenses necessary for bulk importation and distribution of CPBMs.
Prohibition Partners anticipates that bulk imports will catalyze demand for CPBM: As bulk imports increase, so will patient access, driving down the cost of medicines to patients and the National Health Service, improving stability of access, while facilitating an exponential growth in patient numbers. Prohibition Partners Report, December 2019. https://prohibitionpartners.com/reports/#the-uk-cannabis-report.
By 2024, the UK medical cannabis market is predicted to be worth nearly £1bn (US$1.3bn), servicing more than 400,000 active patients. With lower costs, easier access and up to fifty-two treatable conditions, Prohibition Partners estimates that the total patient base for medical cannabis in the UK could reach four million during the same time period. This trend is reenforced by the independent research group Drug Sciences Project Twenty21, that launched Europes largest medical cannabis patient trials in the UK. Lead investigator, Professor David Nutt, anticipates patient prescriptions will increase by 20,000 due to this trial alone. https://www.theguardian.com/society/2019/nov/03/medical-cannabis-uk-clinical-trial-patients-nhs
Overview of Canmart, a Licensed UK Operator
Canmart possesses all necessary licenses from the UK Home Office and the MHRA to import and distribute CPBMs to authorized patients in the UK. Canmart operates a 30,000 square foot storage and distribution facility in Southeast England. David Dean and Darran Quin, the co-founders of Canmart, have over sixty years of combined logistics and distribution experience in the pharmaceutical and healthcare sectors. In addition, Canmart has hired a patient and physician-centric marketing and sales team, led by Josh Squires-Quinn, who has functional sales and marketing expertise and experience in the delivery of global change programs. Tim Henley, a Director of the Cannabis Trade Association in the UK and IT expert also joins the team. Canmart ensures top-quality standards from product delivery are met, under the oversight of Umesh Chauhan, a superintendent pharmacist and Canmarts designated responsible person.
In July 2020, Canmart imported its first legal prescription and distributed medical cannabis to a registered patient through a licensed pharmacy, a process that validated the business model. Canmart has all necessary licenses, logistics expertise, storage facilities, solid pharmaceutical and healthcare relationships. As an early mover in the UKs medical cannabis market, Canmart is well-positioned and plans to distribute CBPMs to meet growing patient demand. Co-Founder and Managing Director of Canmart, Darran Quinn, states;
https://www.irw-press.at/prcom/images/messages/2020/53676/Halo Signs CanMart Final RELEASE_PRCOM.002.jpeg
Figure 2 : David Dean and Darran Quin, the co-founders of Canmart
Dave Dean, Co-Founder and Operations Director, and I are very excited to join the Halo family. We have been involved in the UK medicinal cannabis market for two years, and have seen significant progress. With Halos deep experience and business acumen in the cannabis industry, this transaction when closed, will help us achieve our desired growth targets. We especially are looking forward to bringing the Bophelo product to the UK, thereby creating and facilitating a gateway for high-quality African cannabis, grown from award-winning genetics. We expect this unique combination of quality and affordability will allow Canmart to reach even more patients in the growing UK market.
Halos Intended Global Vertical Integration
The cultivation and manufacturing operations operated by the Halos subsidiary, Bophelo Bioscience & Wellness (Pty) Ltd. (Bophelo), combined with the importation and distribution capabilities of Canmart, are expected to create a well-positioned business combination to serve the growing UK market. Initially, Bophelos cannabis is planned to route through Medcan in Malta, manufactured into CBPMs, imported into the UK, and distributed by Canmart to pharmacies and clinics.
Furthermore, with the cultivation operations currently underway at Bophelo, Halo is leveraging award-winning strains from DNA Genetics and Zkittlez to import and distribute high-quality, low-cost flower and oils to the UK. Through Halos vertically integrated global supply chain, UK patients will have access to high-quality, proprietary, branded flower and oils. Simultaneously, the Cannafeel app, currently being developed by Halo, is expected to increase Canmart patient acquisition, by helping patients understand the benefits of the different cannabis strains Bophelo is currently cultivating, and making recommendations that they can discuss with their medical specialists, bolstering confidence in Canmart CBPMs, medical prescriptions, and brand awareness.
Andreas Met, Co-Founder of Halo and Head of International Operations, comments:
Signing this deal is exciting because the UKs cannabis market is projected to be larger than Germany by 2024-and potentially could be the largest single medical cannabis market in the world. Once completed, this acquisition-fueled by our Lesotho grow operations-positions Halo to grow rapidly in the UK market, a key component of our international growth plan. In 2021, we plan to import product grown at Bophelo to the UK.
Transaction Details
Pursuant to the terms of the Share Purchase Agreement, Halo will acquire 100% of Canmarts issued and outstanding common shares from the shareholders of Canmart (the Shareholders) in exchange for the issuance of up to 72,463,768 Halo Shares. Completion of the Acquisition is subject to customary closing conditions, including receipt of approval from the NEO Exchange Inc. (the NEO). 27,870,680 Halo Shares will be issued at closing, with the remaining two tranches of 27,870,680 and 16,722,408 Halo Shares to be issued upon the achievement of performance milestones within two years from the closing of the Acquisition. This includes selling legally imported prescriptions to 50 unique patients as well as importing £150,000 of medical cannabis products at a cost low enough to generate profitable sales.
In connection with the closing of the Acquisition, Halo also plans to issue an aggregate of 5,434,782 Halo Shares as a transaction fee to Anmoho LLC an arms length consultant of the Company. The consulting services Anmoho LLC provided include general and advisory review, due diligence, the preparation of a valuation and supporting the Company in negotiations with the vendor.
Pursuant to the terms of the Share Purchase Agreement, the Shareholders have agreed, on closing, to enter into a pooling agreement with the Company, whereby the Shareholders would not in the aggregate, during any trading day, sell on a Canadian stock exchange such aggregate number of Halo Shares that would exceed 10% of the prior trading days total volume of sale orders in Halo Shares. Anmoho LLC has also agreed to be restricted from selling more than 10% of the prior trading days total volume of sale orders in Halo Shares. Furthermore, 10% of all the Halo Shares issued to the Shareholders in connection with the Acquisition will be escrowed for a 24 month period after closing pursuant to the terms of an escrow agreement to be entered into among the Company, the Shareholders and Odyssey Trust Company.
The Acquisition is expected to close on or before October 30, 2020 and is subject to the satisfaction or waiver of customary conditions, including the receipt of all applicable regulatory and NEO stock exchange approvals.
About Canmart
Established in December 2018, Canmart was one of the first companies set up in response to the legalization of medical cannabis in the UK. With expertise in cannabis education, storage and distribution, Canmart holds all relevant licenses to store and distribute CBPMs in the EU.
Located in the southeast of England, Canmart operates in a 30,000 square foot, third party logistics warehouse, set up to focus on the pharmaceutical and healthcare industries. Leveraging their vast network to bring innovative and high-quality products to market, Canmart currently imports and distributes licensed CBPMs to specialist doctors and their patients throughout the UK, a milestone that began in 2020. Canmart has forged strong relationships with specialist couriers, clinics, hospitals and pharmacies, providing smooth, legal access to products through a multitude of channels--always delivering exceptional service to patients and customers.
About Halo
Halo is a leading, vertically-integrated cannabis company that cultivates, extracts, manufactures and distributes quality cannabis flower, oils, and concentrates, and has sold approximately six million grams of oils and concentrates since inception. Halo continues to scale efficiently, partnering with trustworthy leaders in the industry, who value their operational expertise in bringing top-tier products to market. Current growth includes expansion in key markets in the United States and Africa, with planned geographic expansion into U.K. and Canadian markets. With a consumer-centric focus, Halo markets value-driven, branded, and private-label products across multiple product categories. The Company also has acquired a range software development assets, such as the technology platforms CannPOS, Cannalift, and more recently signed a deal to acquire CannaFeels. Halo also owns the inhalation technology Acudab.
Halo is led by a strong, diverse and innovative management team, with deep industry knowledge and blue-chip experience. The Company is currently operating in the United States in California, Oregon, and Nevada. Internationally, the Company is currently cultivating cannabis at Bophelo Bioscience & Wellness (Pty) Ltd, in Lesotho under a 200-hectare license and is planning importation and distribution of cannabis based products for medical use into the United Kingdom via Canmart.
Contact Information
Halo Investor Relations
info(at)halocanna.com
Cautionary Note Regarding Forward-Looking Information and Statements
This press release contains certain "forward-looking information" within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only Halos beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of Halos control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or may contain statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "will continue", "will occur" or "will be achieved". The forward-looking information and forward-looking statements contained herein include, but are not limited to, statements regarding the Acquisition, the Companys prospects and proposed distribution of CBPMs in the UK and the importation of cannabis products to Malta and the UK.
By identifying such information and statements in this manner, Halo is alerting the reader that such information and statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results to be materially different from those expressed or implied by such information and statements. In addition, in connection with the forward-looking information and forward-looking statements contained in this press release, Halo has made certain assumptions. Although Halo believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements. Among others, the key factors that could cause actual results to differ materially from those projected in the forward-looking information and statements are the following: delays in obtaining required approvals from regulators, changes in general economic, business and political conditions, including changes in the financial markets; and the other risks disclosed in the Company''s annual information form dated April 16, 2020 and available on the Companys profile at www.sedar.com. Should one or more of these risks, uncertainties or other factors materialize, or should assumptions underlying the forward-looking information or statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected.
The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and Halo does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws. All subsequent written and oral forward-looking information and statements attributable to Halo or persons acting on its behalf is expressly qualified in its entirety by this notice.
Third Party Information
This press release includes market and industry data that has been obtained from third party sources, including industry publications. The Company believes that the industry data is accurate and that its estimates and assumptions are reasonable, but there is no assurance as to the accuracy or completeness of this data. Third party sources generally state that the information contained therein has been obtained from sources believed to be reliable, but there is no assurance as to the accuracy or completeness of included information. Although the data is believed to be reliable, the Company has not independently verified any of the data from third party sources referred to in this press release or ascertained the underlying economic assumptions relied upon by such sources.
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Datum: 05.10.2020 - 05:13 Uhr
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