MARKHAM, ON, April 12, 2018 /CNW/ - MedReleaf Corp. (TSX:LEAF) ("MedReleaf" or the "Company"), Canada's first and only ISO 9001 and ICH-GMP certified cannabis producer, today announced that it has closed its previously announced agreement to acquire 1 million square feet of existing greenhouse infrastructure on a 69 acre property in Exeter, Ontario ("Exeter Facility") and 95 acres of adjacent land. The total purchase price for the transaction is approximately $26 million, consisting of $21.5 million in cash and 225,083 common shares of MedReleaf.
"MedReleaf is advancing on all fronts through focused capacity expansion, innovative brand and product development, and significant supply agreements that reinforce our position as one of the leading producers of premium cannabis to the Canadian adult-use and global medical markets," said Neil Closner, CEO of MedReleaf. "The Exeter Facility expansion will add timely capacity to support market share leadership in our target segments while maximizing long-term return on invested capital."
Work to retrofit the Exeter Facility for cannabis production will begin in April with first harvest expected in the first quarter of 2019, subject to receipt of a licence from Health Canada. MedReleaf is fully funded to complete the project with cash on hand. The Exeter Facility, after full retrofit, will have annual production capacity of up to 105,000 kilograms, increasing MedReleaf's fully funded annual production capacity to 140,000 kilograms.
Strategically positions MedReleaf with one of Canada's largest and most diverse cannabis cultivation portfolios
Greenhouse cultivation is ideal for producing raw material inputs for extract production, complementing MedReleaf's award-winning portfolio of premium indoor grown cannabis products
Greenhouse production at scale will lower overall unit production costs and provide added flexibility to enhance adjusted aggregate production contribution margin across product lines
The Bradford expansion plan for 35,000 kilograms per year of premium indoor production remains on track for completion by the end of summer of 2018 and the first product is anticipated to come from the retrofitted Exeter Facility by the first quarter of 2019
The Exeter location has adjacent land totaling 95 acres, which could accommodate a greenhouse approximately 1.5 times larger than the Exeter Facility, allowing for future capacity expansion that would leverage investment in shared infrastructure developed as part of the initial retrofit
About MedReleaf Corp.
Voted Top Licensed Producer at the 2017 Lift Canadian Cannabis Awards, MedReleaf is an R&D-driven company dedicated to innovation, operational excellence and the production of top-quality cannabis. Sourced from around the world and carefully cultivated in one of two state of the art ICH-GMP and ISO 9001 certified facilities in Ontario, the Company delivers a variety of premium products for the global medical market and is committed to serving the therapeutic needs of its medical patients and providing a compelling product assortment for the adult-use recreational consumer.
For more information on MedReleaf, its products, research and how the Company is helping patients #livefree, please visit MedReleaf.com or follow @medreleaf.
Forward Looking Statements
This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation, which can be identified by the use of forward-looking terminology such as "expect", "likely", "may", "will", "should", "could", "intend", "anticipate", "potential", "proposed", "estimate" and other similar words, including negative and grammatical variations thereof, or statements that certain events or conditions "may", "would" or "will" happen, or by discussions of strategy. Forward-looking information include estimates, plans, expectations, opinions, forecasts, projections, targets, guidance or other statements that are not statements of fact. The forward-looking information contained in this press release are based upon MedReleaf's current internal expectations, estimates, projections, assumptions and beliefs and views of future events which management believes to be reasonable in the circumstances, including expectations and assumptions regarding the regulatory environment in Canada. Forward-looking information is subject to known and unknown risks and uncertainties, including risks and uncertainties which could cause actual events or results to differ materially from those described in any forward-looking information, including risks and uncertainties relating to the closing of the acquisitions contemplated by the Agreements (which remains subject to satisfaction or waiver of standard conditions); obtaining all necessary regulatory and governmental approvals, including, but not limited to, those of Health Canada and the TSX; the completion of the Bradford expansion plan and the related impact on the Company's production capacity; the expected timing for completion of the retrofit and construction of the additional facilities, and commencement of production, at the Exeter Facility; the ability of the Company to increase its production capacity in a financially prudent manner; the impact of production at the Exeter Facility on the Company's profitability; the ability of the Company to generate returns on its capital investments; global demand for cannabis products and the Company's ability to meet such demand; general economic conditions; changes in the regulatory and legal environments relating to cannabis; competition; counterparty risk; as well as those risks and uncertainties and other cautionary statements contained in MedReleaf's Annual Information Form dated June 27, 2017, which is available electronically at www.sedar.com. Any forward-looking information contained herein speaks only as of the date on which it is given and, except as required by law, MedReleaf does not undertake any obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.