Mr. Sean Dollinger reports
NAMASTE ANNOUNCES SIGNING OF A DEFINITIVE AGREEMENT TO ACQUIRE 51% OF THE OUTSTANDING SHARES OF INFINITE LABZ
Further to the April 5, 2018, announcement of a letter of intent with 2624078 Ontario Inc., Namaste Technologies Inc. has signed a share purchase agreement to acquire 51 per cent of the outstanding shares of 2624078 Ontario (Infinite Labz) and has agreed to finance the construction of Infinite Labz's facility in Etobicoke, Ont.
Infinite Labz intends to submit an application to become a Health Canada licensed producer of medical cannabis oil, with the intention of resale to both the medical and recreational markets. Infinite Labz also intends to apply to become a licensed dealer of medical cannabis in accordance with Health Canada regulations, allowing the company to initiate research and development, import cannabis, perform analytical testing, and conduct clinical studies with medical cannabis, dried flower and oil.
Namaste anticipates an accelerated demand for cannabis oils and believes that a dedicated facility designed for the sole purpose of producing oils and extracts can provide the company with a strong supply of high-margin oil products. Following completion of construction and licensing, the facility will allow Infinite Labz to produce oils and extracts at a low cost for sale to registered patients of Namaste's wholly owned subsidiary, Cannmart Inc., resulting in increased margins for Namaste. Inifinite Labz also plans to produce and sell oils/extracts directly to other licensed producers and participate in the recreational market by selling its products to licensed provincial distributors. The company also intends to use its hardware experience to produce specialized pod-based vaporization systems for use with oil formulations. Namaste has established a strong brand through its existing retail channels and intends on building on that unique brand in the cannabis oil sector through Infinite Labz.
If a licensed dealer licence is obtained, Infinite Labz will facilitate importation of medical cannabis for testing purposes, following which an application for approval from Health Canada to import for resale purposes can be made. The licensed producer licence, in combination with the licensed dealer licence, would allow Infinite Labz to gain full exposure to the exciting segment of the medical cannabis industry through importation, testing, and production of cannabis oils and extracts.
Key share purchase agreement terms:
Namaste will provide financing, through a first-priority shareholder loan, of up to $750,000 for construction of the Infinite Labz facility.
Namaste's shareholder loan will be repaid from net profits.
Namaste will acquire 51 per cent of the outstanding shares of Infinite Labz.
Infinite Labz management team has entered into consulting agreements to oversee construction of the facility and the applications for the licensed producer and licensed dealer licences.
Sean Dollinger, president and chief executive officer of Namaste, commented: "We are very pleased to have entered into a definitive agreement as we believe that the facility at Infinite Labz can be instrumental in allowing Namaste to participate in the recreational market. In addition, the facility would allow Namaste to control the production and distribution of cannabis oil for sale through Cannmart as well as for resale to licensed producers. We believe that having the ability to offer oil production services for smaller craft producers through Infinite Labz will add significant value moving forward as we look to develop relationships with all types of licensed producers that enable us to provide our patients with a broad range of cannabis products. Our hope is that these services will lead to additional opportunities with licensed producers who see value in working collaboratively. In addition to producing oil through the facility, Cannmart plans on providing oil filling services for prefilled cartridges and vaporizers pods once approved by Health Canada. This facility will not only support the company's growth in the sale of medical cannabis, but it will also ensure that we stay ahead of the curve in anticipation of federal changes to the legal cannabis industry."
About Namaste Technologies Inc.
Namaste Technologies is a global leader in the sale of medical cannabis consumption devices. Namaste has nine offices with multiple distribution centres around the globe and operates over 30 websites under various brands. The company is focused on patient acquisition through NamasteMD and intends on building Canada's largest database of medical cannabis patients. The company's subsidiary, Cannmart, is an ACMPR (Access to Cannabis for Medical Purposes Regulations) licensed producer with a sales-only licence, whereby the company will offer a large variety of medical cannabis sourced from domestic and international producers.
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