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International Cannabrands Inc
Symbol JUJU
Shares Issued 83,757,880
Close 2018-04-24 C$ 0.165
Market Cap C$ 13,820,050
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Int'l Cannabrands to buy control interest of La Vida

2018-04-24 10:56 ET - News Release

Mr. Travis Belcher reports

INTERNATIONAL CANNABRANDS LTD. ANNOUNCES PROPOSED ACQUISITION AND COLLABORATION IN CALIFORNIA

International Cannabrands Inc. has entered into a letter of intent with Bryce Berryessa and Eric Hara to acquire a controlling interest in La Vida Verde Inc., a company existing under the laws of the State of California. The LOI outlines the general terms and conditions pursuant to which Mr. Berryessa and Mr. Hara would be willing to complete a transaction that would result in the company: (a) acquiring 51 per cent of LVV, (b) providing $2-million (U.S.) of expansion capital to LVV, and (c) having an option to acquire the remaining 49 per cent of LVV based on agreed-upon formula. The sellers will continue to be employed by LVV and will continue to operate and manage the business. In addition to LVV's current products, LVV will be responsible for distribution of the company's JuJu Roya product lines in California.

Mr. Hara, chief executive officer of LVV, is a former chef and restaurant operator for several critically acclaimed restaurants in New York. He earned the prestigious Five Star Diamond Award in 2010, and was ranked one of the top chefs in the world. He is a food industry expert in product formulation and emerging food trends, with such products as Wonderfully Raw (now Sejoya), a line of organic snack foods including Cocoroons, that is widely distributed in over 3,000 stores in the United States, including Costco and Whole Foods.

Mr. Berryessa, president of LVV, is a renowned expert in sustainable cannabis cultivation and extraction methods and has been at the forefront of the technology since 2011. He currently is a board member of the California Growers Association (representing Santa Cruz and Monterey county), board member of the California Manufacturers Association and a board member of the California Cannabis Industry Association. He has co-founded award-winning brands -- Hashman Infused and Waxman Concentrates -- and is founder and chief executive officer of a Santa Cruz-based dispensary, the TreeHouse.

The transaction is at arm's length and will be structured following a review of all relevant legal, regulatory and tax matters. The sellers have agreed to negotiate exclusively with the company for a period of 60 days. The LOI contemplates the company and LVV entering into a definitive agreement on or before May 16, 2018, and to complete the transaction within approximately 75 days (or such other dates as may be agreed to by the parties).

The aggregate acquisition cost to the company, including the expansion capital, is $8.5-million (U.S.) and includes the issuance of 17.5 million of voting shares of the company at a deemed price of 20 U.S. cents. The shares will be subject to a lock-up whereby the sellers will only be permitted to sell 50 per cent of their shares in calendar 2019 and 50 per cent in calendar 2020.

The option to sell/purchase the remaining 49 per cent of LVV is expected to be structured as both a put option by the sellers and a call option by the company, on an earnings before interest, taxes, depreciation and amortization-based formula determined in 2021 following preparation of audited financial statements of LVV and may be paid through the issuance of voting shares of the company or voting shares of the company and 20 per cent in cash.

The transaction is subject to a number of material conditions, including the following:

  • The company completing a financing to raise approximately $5-million to $10-million;
  • Completion of due diligence investigations to the satisfaction of each of the company and the sellers;
  • LVV obtaining appropriate licences for the manufacturing and distribution of cannabis for the State of California;
  • The sellers providing audited financial statements for LVV's most recently completed financial year and unaudited financial statements for its most recent quarter.

The transaction is also subject to requisite regulatory approvals and standard closing conditions, including the approval of the directors of each of the company and LVV of the definitive agreement. The legal structure for the transaction will be confirmed after the parties have considered all applicable tax, securities law and accounting efficiencies.

The company is incorporated under the provisions of the Business Corporations Act (Alberta) with its registered office in Calgary, Alta., and its head office in Denver, Colo. The company is a reporting issuer in the provinces of British Columbia, Alberta and Ontario.

About La Vida Verde Inc.

La Vida believes that the best medicine starts with the food you eat and it takes pride in producing products for people who are searching for a natural and healthy alternative for nurturing their bodies. All its product use only healthy fats, are vegan, organic, gluten-free, paleo friendly and low glycemic. La Vida Verde is a leader in the extraction field, being one of the first to incorporate full-spectrum testing in every product -- testing for potency, terpenes, pesticides and residual solvents. Its concentrates are pharmaceutical grade and free of any pesticides, microbial contaminants, heavy metals or additives.

About International Cannabrands Ltd.

International Cannabrands acquired the exclusive rights to Julian Marley's JuJu Royal brand to educate people about the natural connection between Julian Marley, Rastafarian culture, reggae music and marijuana. International Cannabrands generates revenue from licensing brands to growers, edible manufacturers, oil extractors, producers of ancillary products and apparel in the United States where cannabis has been legalized at the state level, as well as products containing CBD in the United States and internationally. Select JuJu Royal products are available in California, Washington, Colorado and Puerto Rico with CBD-only products available in the United Kingdom, the birthplace of Julian Marley. The company is looking to expand JuJu Royal into Nevada in the near future.

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