(Image Credit - Nick Youngson)
TORONTO, May 17, 2017 (GLOBE NEWSWIRE) -- The Canadian Bioceutical Corporation (the “Company” or “BCC”) (CSE:BCC) (OTC:CBICF) today announced that the Company has signed non-binding Letters of Intent (LOI’s) to acquire up to four cannabis enterprises in Arizona and Maryland. In compliance with Arizona and Maryland legislation, BCC will be acquiring four management companies, three in Maryland, one in Arizona, that provide substantial management, finance, real estate, staffing, logistics and administrative services to entities licensed to sell cannabis to registered medical patients.
BCC is to acquire a management company providing extensive services to an operational licensee with a cultivation, production and dispensary license. Highlights include:
Growing, revenue generating business
Profitable and cash flow positive
Dispensary located in affluent and populous area of Phoenix, Arizona
Arizona medical market currently has over 125,000 registered patients, similar in size to the entire Canadian market
Third acquisition in rapidly growing Arizona market, following January acquisition of profitable platform for growth and March acquisition supporting a third licensee.
Upon completion, transaction will bring total number of Arizona dispensaries under the Health for Life umbrella – current and under development - to four in a state with less than 100 dispensaries in total.
BCC is to acquire three management companies that will each provide operational and other services to three new medical marijuana dispensaries and one production operation. Highlights include:
Three dispensary licenses of only 109 granted state-wide.
One of only 15 production licenses issued state-wide. License allows for the production of high-margin concentrate-based products such as oils, shatter, wax and live resin
With a population of 6 million, the Maryland market is anticipated to grow to US$125-175 million by 2020 (source: ArcView)
All licenses located in the populous Baltimore-Bethesda region
The consideration for all four acquisitions will be discussed in more detail upon closing of the acquisitions, anticipated on or before June 30, 2017.
“The Arizona acquisition, upon closing, will immediately be accretive and contribute towards revenue growth and profitability,” stated Scott Boyes, CEO of BCC. “Furthermore, we anticipate being able to generate further revenue growth and margin expansion by applying our operational and commercial best-practices established at our existing Arizona assets. The Maryland transactions will immediately provide a strong foothold in this promising early-stage market. With one of only 15 production licenses, we will be well-positioned to establish a solid foundation in the high-margin concentrates business, leveraging the strength of our award-winning MPX brand. Additionally, the Maryland acquisitions would add three dispensaries under our management expanding our growing retail footprint, bringing us to ten in total, based on assets under development and pending acquisitions. More details will be disclosed upon closing of the transactions.”
About The Canadian Bioceutical Corporation
BCC, an Ontario corporation, through its wholly owned subsidiaries in the U.S., provides substantial management, staffing, procurement, advisory, financial, real estate rental, logistics and administrative services to two medicinal cannabis enterprises in Arizona operating under the Health for Life (dispensaries) and MPX (high-margin concentrates wholesale) brands. The successful Health for Life (“H4L”) brand operates in the rapidly growing Phoenix Metropolitan Statistical Area (MSA) with a population of 4.6 million people. The award-winning Melting Point Extracts (“MPX”) brand is carried by over 40% of Arizona dispensaries.
The Company is supporting development of a third licensed dispensary in Arizona. Additionally, BCC is expanding its U.S. footprint, acquiring additional assets supporting cultivation, production and up to three dispensaries in Massachusetts, as well as a cultivation and production wholesale business in Nevada. Both Massachusetts and Nevada are implementing legalization of adult use.
The Company also leases a property in Owen Sound, Ontario, for which an application to Health Canada has been made for a cannabis production and sales license. In addition, the Company will continue its efforts related to its legacy nutraceuticals business.
Cautionary Statement Regarding Forward-Looking Information
This news release includes certain "forward-looking statements" under applicable Canadian securities legislation that are not historical facts. Forward-looking statements involve risks, uncertainties, and other factors that could cause actual results, performance, prospects, and opportunities to differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements in this news release include, but are not limited to, the Transaction and BCC's objectives and intentions. Forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties and other factors which may cause actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic and social uncertainties; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; delay or failure to receive board, shareholder or regulatory approvals; those additional risks set out in BCC's public documents filed on SEDAR at www.sedar.com; and other matters discussed in this news release. Although BCC believes that the assumptions and factors used in preparing the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. Except where required by law, BCC disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.