Mr. Jonathan Gilbert reports
SCYTHIAN BIOSCIENCES CORP. ANNOUNCES PROGRESSION OF GLOBAL EXPANSION EFFORTS WITH LETTER OF INTENT TO ACQUIRE MMJ COLOMBIA PARTNERS INC.
Scythian Biosciences Corp. has signed a binding letter of intent to acquire MMJ Colombia Partners Inc., pursuant to the terms of a definitive agreement to be negotiated between the parties. The acquisition will result in Scythian becoming the 100-per-cent shareholder of MMJ Colombia, an Ontario company that is expected to finalize the purchase of 90 per cent of the issued and outstanding shares of Colombia-based ColCanna SAS prior to the completion of the acquisition. The acquisition is conditional upon the completion of MMJ Colombia's acquisition of ColCanna and ColCanna's receipt of the final Colombian licences for the cultivation, production, research and export of medical cannabis CBD (cannabidiol) and THC (tetrahydrocannabinol) extracts.
ColCanna is the first medical cannabis producer in the Colombian coffee zone to receive pending licences to cultivate, produce, research and export medical cannabis CBD and THC extracts. It is a government-backed operation with 35 acres of available land in Chinchina, Caldas, Colombia, all of which is expected to be developed and used for the cultivation of cannabis. Located in a temperate climate that supports four harvests a year, the first of which is expected in late 2018, this area is ideal for year-round cultivation without the need for artificial climate control. Currently, ColCanna is in the process of constructing over 500,000 square feet of total greenhouse production space and is planning to build its laboratory for the fabrication of cannabis extracts in a warehouse located in Pereira. Following construction, ColCanna anticipates that these facilities will be capable of producing over 2.6 million millilitres of medicinal oil per year.
"Scythian is proud and privileged to be partnered with Alejandro Urdaneta Santos to become the first cannabis cultivator in one of the most famous, fertile and temperate climates on Earth," said Scythian's chief executive officer, Jonathan Gilbert. "With a climate that allows four harvests a year, we can now expand our production, research and retail of the highest-quality cannabis products in Colombia and the world."
In accordance with the terms of the letter of intent, Scythian and MMJ Colombia will negotiate and enter into a binding definitive agreement governing the acquisition. As consideration for the acquisition, Scythian will:
- Advance $1.2-million (U.S.) of the purchase price in cash upon receipt by ColCanna of the final cannabis licences;
- Issue on the closing date $32-million of common shares in the capital of Scythian at an issue price equal to the volume-weighted average price of the common shares over the 20 trading days prior to the closing date of the acquisition, provided that no less than 1.57 million common shares will be issued as share consideration;
- Issue on the closing date $5-million (U.S.) of non-interest-bearing, unsecured promissory notes for the following principal amounts due on the following dates:
- $2-million (U.S.), due on June 30, 2018;
- $2-million (U.S.), due on Sept. 30, 2018;
- $500,000 (U.S.), due on Dec. 30, 2018;
- $500,000 (U.S.), due on March 19, 2019.
The promissory notes may be repaid by way of cash or common shares at the option of Scythian.
Scythian's board of directors has engaged Clarus Securities Inc. to provide an opinion on the fairness of the acquisition, from a financial point of view, to the shareholders of Scythian.
The acquisition is subject to regulatory approval by the TSX Venture Exchange.
About Scythian Biosciences Corp.
Scythian is a research and development company committed to advancing prevention and treatment efforts for concussion and traumatic brain injury with its proprietary cannabinoid-based combination drug therapy.
Scythian's mission is to be the first accepted drug regimen for the treatment of concussion. Scythian is partnered with the University of Miami and its neuroscientific team to conduct preclinical and clinical trials of its drug regimen. Through the company's collaborative efforts with the university, Scythian has access to the university's extensive network of experts in the fields of traumatic brain injury and concussion.
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