Investor Ideas Potcasts #549, Cannabis News and Stocks on the Move; (CSE: VEXT), (CSE: CURA) (TSXV: KHRN) (OTCQX: KHRNF), (CSE: BLO)
Delta, Kelowna, BC - April 7, 2021 (Investorideas.com Newswire) www.Investorideas.com, a global news source covering leading sectors including marijuana and hemp stocks and its potcast site, www.potcasts.ca release today's podcast edition of cannabis news and stocks to watch plus insight from thought leaders and experts.
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Investor Ideas Potcasts #549, Cannabis News and Stocks on the Move; (CSE: VEXT), (CSE: CURA), (TSXV: KHRN) (OTCQX: KHRNF), (CSE: BLO)
Today's podcast overview/transcript:
Vext Science, Inc. (CSE: VEXT) (OTCQX: VEXTF) a cannabinoid brand leader based in Arizona, leveraging its core expertise in extraction, manufacturing, cultivation and marketing to build a profitable multi-state footprint, announced today that it has entered into three separate purchase and sale agreements to acquire: (i) a vacant industrial facility located in Eloy, Arizona; (ii) the Company's operated indoor cultivation facility in Phoenix; (iii) and the Company's operated indoor cultivation facility in Prescott Valley (collectively, the "Transactions"). Vext will pay approximately $6.55 million in aggregate cash consideration upon the closing of the Transactions, representing the outright purchase of the Eloy facility, and deposits on the Phoenix and Prescott Valley facilities. The Company expects to enter into vendor financing arrangements for the balance of the Phoenix and Prescott Valley facilities.
"Arizona represents one of the most exciting growth opportunities in the U.S. cannabis market today, and by adding wholly-owned cultivation capacity, we are ensuring that Vext is positioned to maximize its share of this growth through both retail and wholesale channels," said Eric Offenberger, CEO of Vext. "With the move to adult-use legalization in January and recent expansion announcements in other industries such as semiconductor production, we expect it to become increasingly challenging to find suitable cultivation locations within proximity to key population centers. By owning and expanding our cultivation capacity, we ensure stability of supply and solid margins both for the production of our award-winning Vapen brand, and our operated dispensaries. The Transactions offer us the flexibility to sell high-quality production into the wholesale market in the short term to generate additional cash flow, while looking to accretively add to our Arizona retail footprint."
Curaleaf Holdings, Inc. (CSE: CURA) (OTCQX: CURLF), a leading international provider of consumer products in cannabis has successfully completed the previously announced acquisition of EMMAC Life Sciences Limited, the largest vertically integrated independent cannabis company in Europe, for base consideration of approximately US$50 million in cash and 17.5 million shares of Curaleaf, with additional consideration to be paid based upon the successful achievement of performance milestones. Curaleaf has simultaneously established Curaleaf International Holdings Limited in Guernsey to hold the EMMAC investment and further its European expansion.
To accelerate the expansion of Curaleaf International, Curaleaf has secured an investment of US$130 million from a single strategic institutional investor in exchange for 31.5% equity stake in Curaleaf International, implying a $413 million Post Money valuation, with US$80 million in cash available to spend. The subscription will fund the entire cash portion of the EMMAC acquisition consideration of US$50 million with the remaining US$80 million to be used to fund Curaleaf International's current capital expenditures plan through 2022, as well as its pipeline of potential acquisitions. This infusion of outside capital into Curaleaf International significantly accelerates Curaleaf's expansion plans in Europe by fully funding Curaleaf's cash outlay for the EMMAC acquisition and providing the capital required to support Curaleaf International's near-term European rollout. With its foreseeable expansion budget fully funded, Curaleaf's new international business can focus on executing its further European expansion.
Curaleaf and the strategic investor have entered into a shareholders' agreement regarding the governance of Curaleaf International pursuant to which Curaleaf will have control over operational issues as well as raising capital and the ability to exit the business. In addition, the strategic investor's stake is subject to put/call rights which permits either party to cause the stake to be bought out by Curaleaf for Curaleaf equity starting in 2025.
Boris Jordan, Executive Chairman of Curaleaf, stated, "The successful completion of our acquisition of EMMAC, and the formation of our new Curaleaf International business, marks a transformational launching point for our entrance into the European cannabis market. Building on our market leading position in the U.S., this transaction establishes Curaleaf as the global, pure play, cannabis market leader by revenue and geographic reach. With our single strategic institutional investor, we have set a strong foundation for Curaleaf International's future growth trajectory. On behalf of the Curaleaf Board of Directors and management team, we are thrilled to welcome Antonio Costanzo, co-founder and CEO of EMMAC, as the CEO of Curaleaf International, and the entire EMMAC team to Curaleaf."
The new Curaleaf International platform includes cultivation, EU GMP-certified processing, distribution, and R&D operations across several key European medical cannabis markets, including the United Kingdom, Germany, Italy, Spain and Portugal. Terra Verde, Curaleaf International's European market cultivation facility in Portugal, is one of the oldest licensed cannabis growing facilities in Europe with approximately 2 hectares of cultivation area and is an industry leader on the cannabis production cost efficiency front. The Portugal based cultivation facility provides Curaleaf International with the potential to serve customers across key European medical cannabis markets as well as supporting exports to countries such as Israel, among others. Curaleaf International plans to significantly increase its cultivation capacity in 2021, and to exceed 10 tons per year by 2022, in order to accommodate future growth related to the expansion of access to cannabis across the major European medical and adult-use, as well as export markets. Curaleaf International also has an operational presence and partnerships in European Union countries that are enacting new medical cannabis access programs. Curaleaf International will also serve as the platform for other possible acquisitions in Europe and adjacent areas, and for its participation in pilot adult use programs.
Joseph Bayern, CEO of Curaleaf, commented, "As the consumer and political liberalization trends around cannabis that are sweeping the U.S. are increasingly taking hold across Europe, our expansion into the international cannabis market presents tremendous new long-term growth opportunities for Curaleaf. With the European population of nearly 748 million, the potential European addressable market is more than twice the size of the U.S. addressable market. With the ability to operate our new European business across country borders, with one or two cultivation sites and one manufacturing center to serve the entire region in most cases, combined with our ability to leverage the strength of our consumer packaged goods strategies and innovations from our U.S. operations, we see enormously positive implications for our ability to quickly and efficiently scale the business across Europe."
Khiron Life Sciences Corp. (TSXV: KHRN) (OTCQX: KHRNF), a vertically integrated cannabis leader with core operations in Latin America and Europe, provided an operational update with regards to its supply of EU-GMP medical cannabis products to the UK. To help alleviate bottlenecks and stock outs, the Company has established an offshore inventory of dried flower, for the express purpose of serving UK patients.
Furthermore, the Company is broadening its product portfolio by introducing Khiron 1/14, a high-CBD flower to the UK in Q2/21. This follows a successful launch in Germany, where it is prescribed for indications such as anxiety, substance use disorder, and migraines. Khiron 1/14 will complement Khiron 20/1, a high-THC flower, which is already being prescribed to patients in the UK. Prescribing specialists will also be able to prescribe smaller quantities of our flower products in 5- gram jars (pictured below), thanks to enhanced capabilities at the Company's EU-GMP certified fulfillment partner.
Tejinder Virk, President of Khiron Europe, commented, "The European market is growing and Khiron is well positioned through our differentiated education platform, mounting clinical evidence, and EU-GMP certified products ready for prescription. Our team continues to work diligently to increase patient access to medical cannabis products, and patients will now benefit through greater product variety and volumes. In the coming months, we plan to introduce additional cannabis-based medical products from our registered Colombian strains, elevating the level of clinical data available to medical professionals in the UK."
Cannabix Technologies Inc. (CSE: BLO) (OTC: BLOZF), developer of the Cannabix Marijuana Breathalyzer for law enforcement and the workplace, reported that it will begin beta testing its THC Breath Analyzer (“THCBA”) with a private drug testing clinic located in the Northwestern United States. Cannabix expects to deliver its version 3.0 THCBA prototype to this clinic in the coming weeks to begin a breath testing with select patients. The Company and the clinic have entered into a non-disclosure agreement. The collaborating clinic has a robust drug testing operation and is one of the top drug testing providers to employers within its respective state. The high-volume clinic has a diverse range of patients and focuses on private sector testing for alcohol and illicit drugs. The clinic has extensive experience beta testing with new drug testing technologies. In the recent past, the collaborating clinic was selected to be an early tester of oral swab devices, which have been authorized for use in certain jurisdictions.
Beta-testing of the THCBA prototype will be focused on training the device’s machine learning database, to help determine sensitivity ranges and improving user and administrator experience. Furthermore, this data will help with identifying cross-reactivity of other substances with the study population. The THCBA is a drug screening device for employers and other markets who are seeking a way to quickly, easily and non-invasively test for recent use of ∆9-tetrahydrocannabinol (“THC”) - the psychoactive component of marijuana that causes impairment.
Current forms of testing for marijuana use can identify THC ranging from minutes to days prior to actual use, making it difficult to show the difference between the two. Studies¹ have shown that breath is a better indicator of impairment than saliva and urine because THC is present in breath for a relatively short period of time (1-3 hours); whereas, it is excreted at detectable levels in other body fluids for many hours, days, or even weeks after smoking. This short time period of detection in breath aligns with the peak impairment window.
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