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Invictus MD Strategies Corp
Symbol IMH
Shares Issued 80,169,306
Close 2018-01-26 C$ 2.35
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Invictus MD to increase AB Labs interest to 50%

2018-01-26 08:57 ET - News Release

Mr. Dan Kriznic reports


Invictus MD Strategies Corp. has sold its first 120 kilograms of dried flower from AB Laboratories Inc., the licensed production facility under the Access to Cannabis for Medical Purposes Regulations (ACMPR), near Hamilton, to Canopy Growth Corp., putting Invictus MD's licence holders on track for achieving 26,000 kg run-rate production capacity for 2018 with net capacity of 22,150 kilograms to Invictus MD.

Additionally, the company is pleased to announce that it has signed the definitive agreement to make its further strategic investment in AB Labs, from its current 33.3-per-cent ownership interest to 50 per cent.

AB Laboratories' products will be used in Canopy Growth's curated CraftGrow line on Tweed Main Street's on-line store. Tweed Main Street features only high-quality cannabis by an elite group of producers, and AB Labs is thrilled that consumers will find its product as part of the Tweed Main Street's carefully curated selections.

"Patients routinely get in touch with AB Labs inquiring about our high-quality product. Now, they can take advantage of Canopy Growth's Tweed Main Street to gain immediate and detailed information about our artisan cannabis. The effort gives us immediate access to the largest customer base in the rapidly expanding medical cannabis market," said Dan Kriznic, chairman and chief executive officer of Invictus MD. "Our collaboration with Canopy Growth demonstrates our commitment to making the sector strong and helping to expose medical cannabis patients visiting Tweed Main Street, to another high-quality, unique brand."

"On behalf of the Canopy Growth team, I want to congratulate the AB Labs team for achieving this milestone," said Mark Zekulin, president, Canopy Growth. "AB Labs is now the second CraftGrow partner to successfully transfer cannabis products to be sold through our Tweed Main Street e-commerce platform. We hope to have AB Labs cannabis available to our customers this quarter and look forward to many more successful transfers in the future."

The company's finalization of the definitive agreement to increase investment in the licensed production facility AB Labs marks another important milestone for Invictus MD as Canada moves within six months of the expected full adult-use legalization of cannabis. AB Labs received the amendment to sell dried marijuana under the ACMPR (to Cannabis for Medical Purposes Regulations) (sales licence) earlier this month.

The terms of the definitive agreement include a direct cash investment in AB Labs for $10-million to be used for the expansion of AB Labs' existing facility, acquisition of the land and building at the existing facility from the landlord, and for the acquisition of an adjacent land and building including retrofitting costs toward the existing building on the adjacent property, for a combined production space of approximately 56,000 square feet. Invictus MD will make available to AB Labs a $2-million line of credit in the event costs exceed budget during the construction period.

Invictus MD also expects its 100-per-cent-owned subsidiary Acreage Pharms Ltd. to receive its sales licence in the first quarter of 2018 as it has already harvested multiple successful crops and product has already been tested. The submission of another licence application to Health Canada by AB Ventures Ltd., and AB Ventures' development permit on the 100 acres of land for the initial phase 1 construction that is fully financed, signals another key milestone as Invictus MD continues to build out significant kilogram capacity for the expected domestic and international demand.

"The increase in our ownership of AB Labs and the renovations of the secondary facility that will provide a combined production space at AB Labs and Acreage Pharms of approximately 95,000 square feet will dramatically advance our timeline for increasing our expected annual run-rate production capacity at our facilities to 26,000 kg in 2018 and 76,000 kg in 2019 in time for the adult-use market. Invictus MD's funded capacity today is approximately 20,600 kg, making it one of the top licensed producers in Canada," said Mr. Kriznic. "Increasing our production capacity has been a sharp focus of the company. Our production will satisfy the significant demand in Canada for high-quality, standardized, pesticide free product for the current medical cannabis market and recreational market that is expected to begin mid-2018."

About Invictus MD Strategies Corp.

Invictus MD Strategies is focused on two main verticals within the Canadian cannabis sector, namely the licensed producers under the ACMPR, being its 100-per-cent investment in Acreage Pharms Ltd., located in west-central Alberta, and 50-per-cent investment in AB Laboratories Inc., located near Hamilton, Ont., which has both its cultivation and sales licence under ACMPR. Combined the two licences and an expected third licence under AB Ventures are expected to have an approximate annual run-rate production capacity of 76,000 kg by 2019. In addition to ACMPR licences the company has an 82.5-per-cent investment in Future Harvest Development Ltd., a fertilizer and nutrients manufacturer based in Kelowna, B.C.

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