VANCOUVER, March 28, 2018 /CNW/ - Choom™ (CSE:CHOO) (OTC:CHOOF) (the "Company" or "Choom") is pleased to announce that it has signed a Letter of Intent ("LOI") to acquire Flower Power Cannabis Pharms Inc. ("Flower Power" or the "Target"), a retail brand experience cannabis company, and its wholly-owned subsidiary High Way 10 Cannabis Pharms Inc. ("High Way 10"), another advanced-stage cannabis production license applicant under the Access to Cannabis for Medical Purposes Regulations ("ACMPR"). High Way 10 is located in southern Saskatchewan and is in the active review stage of Health Canada's application process under the ACMPR.
High Way 10's initial 16,000 sq. ft. facility is located on a 120-acre parcel of land providing ample room for future expansion and is capable of producing approximately 1500 kg of dried cannabis per annum.
Flower Power is advancing their retail store experience strategy across the country, beginning in their home province of Saskatchewan. The company is focused on creating a consumer experience that elevates and evolves the traditional dispensary vibe and intends to have a hybrid of corporately owned and franchised dispensaries subject to the formal legalization of recreational cannabis by Health Canada and provincial and municipal guidelines. Flower Power is actively working through Saskatchewan's retail dispensary permitting and RFP process for the lottery to secure the right to receive a license in multiple markets in the province.
Chris Bogart, President and CEO of Choom™ states, "We are very pleased Choom™ has increased its total production capacity with the addition of potentially our fourth advanced stage applicant. Upon completion of the tenant improvements within the initial 17,000 sq. ft. building, Flower Power intends to submit its affirmation of readiness ("AOR") evidence package to Health Canada, which they hope will follow with the receipt of a cultivation license shortly thereafter. This acquisition further demonstrates our commitment to develop and acquire license and production assets along with retail dispensary opportunities, helping to position us to scale-up rapidly to meet the anticipated Canadian recreation market demand."
Pursuant to the LOI, the Company intends to acquire all of the shares of the Target, which will become a wholly-owned subsidiary of the Company (the "Transaction"), and the Company will issue to the Target shareholders, based on their pro rata holdings, the following shares in the capital of the Company (the "Choom Shares"):
$2,000,000 in Choom Shares on the closing date of the acquisition, calculated using the then 10-day VWAP trading price of the Choom Shares. These Choom Shares will, subject to certain exceptions, be held in escrow and released 10% on the closing and the balance in 15% increments every 6 months over a 36-month period.
$3,000,000 in Choom Shares following receipt by High Way 10 of its confirmation of readiness under the ACMPR application process and calculated using the then 10-day VWAP trading price of the Choom Shares. These Choom Shares will, subject to certain exceptions, be held in escrow and released 10% on the date of receipt of confirmation of readiness and the balance in 22.5% increments every 6 months over a 24-month period.
$3,000,000 in Choom Shares following receipt by High Way 10 of its cannabis sales license under the ACMPR, based on the then 10-day VWAP trading price of the Choom Shares. These Choom Shares will, subject to certain exceptions, be held in escrow and released 10% on the date of receipt of the cannabis sales license and the balance in 45% increments every 6 months over a 12-month period.
The definitive share purchase agreement will include customary conditions, including obtaining all necessary corporate approvals, completion of due diligence and applicable exchange acceptances. The Target acquisition is arms-length. There can be no assurance that the Transaction will be completed as proposed, or at all. The Canadian Securities Exchange has not in any way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release.
"Ideas are the most powerful force in the universe and mother nature has provided us with a beautiful opportunity to create experiences and products that foster unique thinking, creativity and understanding" shares Clayton Sparks, Founder and CEO of Flower Power. "It is extremely exciting, and we are deeply honored to be welcomed into the Choom 'family' of companies and participate in this significant SHIFT in our society and how we experience and treat pleasure and pain."
SAY HELLO TO CHOOMTM
Choom™ was created for and inspired by the Choom Gang; a group of buddies in Honolulu during the 1970's who loved to smoke weed—or as the locals called it, "Choom". Now, after four decades, Choom™ is bringing the spirit of Hawaii to Canada. We're planting our flag in the rapidly growing legal cannabis industry in Canada with our own brand of high-grade handcrafted herb. Choom™ will provide an amazing experience for customers, and bring style, sophistication and fun to the cannabis market with through our Choom™ stores.
REACH FOR YOUR FLOWER.
Flower Power Cannabis Pharms Inc. is a Saskatchewan-based retail brand experience company keenly positioned to inspire a new breed of cannabis consumer. The company has been created to authentically appeal to those looking at the consumption of cannabis as more of a 'WHOLISTIC' choice, rather than "medical" or "recreational". Returning to the roots of this special flower and connecting consumers with its inherent benefits is exactly where Flower Power is positioned to flourish and bloom!
President & CEO
NEITHER THE CANADIAN SECURITIES EXCHANGE NOR ITS REGULATIONS SERVICES PROVIDER HAVE REVIEWED OR ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
This news release contains forward-looking information relating to the Company's proposed activities and other statements that are not historical facts. Forward-looking information relates to management's future outlook and anticipated events or results, and include statements or information regarding the future plans or prospects of the Company. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. These factors include risks and uncertainties associated with the results of diligence investigations, developments in the cannabis sector, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, reliance on key personnel, regulatory risks and delays and other risks and uncertainties discussed in the management discussion and analysis section of the Company's interim and most recent annual financial statement or other reports and filings, including the Company's Listing Statement, made with the applicable Canadian securities regulators. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward looking information.