- Closes share-sale transaction with Final Bell Canada Inc. following Starseed Medicinal’s full production and product fulfillment move to Company’s consolidated London-area facilities
- Concludes site optimization strategy initiated in early 2021; Company intends to use net proceeds of sale primarily to pay down debt
TORONTO, June 15, 2021 (GLOBE NEWSWIRE) — WeedMD Inc. (TSX-V:WMD) (OTCQX:WDDMF) (FSE:4WE) (“WeedMD” or the “Company”), a federally licensed producer and distributor of medical-grade cannabis announced today it has signed and closed a definitive agreement (the “Agreement”) to sell all the shares of its subsidiary’s operating entity, Starseed Medicinal Inc., which had been operating out of the production facility located on Bennett Road North in Bowmanville, Ontario (the “Bowmanville Facility”), to Final Bell Canada Inc. (the “Purchaser”) for C$2.5 million in cash. Starseed Medicinal Inc. is the licence holder for the Bowmanville Facility, which is licensed by Health Canada under the Cannabis Act (Canada) for cultivation, processing and sale of dried cannabis and cannabis extracts, and to conduct research. Net proceeds of the sale will primarily be used by WeedMD to pay down its debt.
The Company retains all aspects of its existing medical cannabis business, including its highly regarded Starseed Medicinal brand. As a result of the facility optimization strategy initiated in early 2021 and the sale announced today, WeedMD is realizing material operational efficiencies by streamlining and consolidating its cultivation operations at its Strathroy, Ontario facility and processing and production activities at its Aylmer, Ontario site.
“We continue to execute on our strategic plans to optimize and solidify the areas of our business that will drive increased revenue, improve our cash-flow, maximize our margins, pay down debt, and move us closer to profitability,” said George Scorsis, Interim CEO and Executive Chair of WeedMD. “Starseed Medicinal has been an important accretive addition to our business and with our operations now fully centralized at our cultivation and production sites in the London-area, we are now fully ramped up in a more efficient manner. We are already seeing these optimization initiatives improving productivity and reducing our production costs, all for the long-term best interests of our patients, customers and shareholders.”
About WeedMD Inc.
WeedMD Inc. is the publicly traded parent company of WeedMD RX Inc. a licence holder producing and distributing cannabis products for both the medical and adult-use markets. The Company owns and operates a 158-acre state-of-the-art greenhouse, outdoor and processing facility located in Strathroy, ON as well as a fully licensed 26,000 sq. ft. Aylmer, ON processing facility, specializing in cannabis extraction. With the addition of Starseed Medicinal, a medical-centric brand, WeedMD has expanded its multi-channeled distribution strategy. Starseed’s industry-first, exclusive partnership with LiUNA, the largest construction union in Canada, along with employers and union groups complements WeedMD’s direct sales to medical patients. The Company maintains strategic relationships in the seniors’ market and supply agreements with Shoppers Drug Mart as well as seven provincial distribution agencies where adult-use brands Color Cannabis and Saturday Cannabis are sold. The Company is also the exclusive Canadian producer and distributor of award-winning U.S.-based wellness brand Mary’s Medicinals sold in both medical and adult-use channels.
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Forward Looking Information
This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation which are based upon WeedMD’s current internal expectations, estimates, projections, assumptions and beliefs and views of future events. Forward-looking information can be identified by the use of forward-looking terminology such as “expect”, “likely”, “may”, “will”, “should”, “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.
The forward-looking information in this news release is based upon the expectations, estimates, projections, assumptions and views of future events which management believes to be reasonable in the circumstances. Forward-looking information includes estimates, plans, expectations, opinions, forecasts, projections, targets, guidance or other statements that are not statements of fact. Forward-looking information in this news release include, but are not limited to, statements with respect to internal expectations, expectations with respect to actual production volumes, expectations for future growing capacity and the completion of any capital project or expansions. Forward-looking information necessarily involve known and unknown risks, including, without limitation, risks associated with general economic conditions; adverse industry events; loss of markets; future legislative and regulatory developments; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the cannabis industry in Canada generally; the ability of WeedMD to implement its business strategies; the COVID-19 pandemic; competition; crop failure; and other risks.
Any forward-looking information speaks only as of the date on which it is made, and, except as required by law, WeedMD does not undertake any obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for WeedMD to predict all such factors. When considering this forward-looking information, readers should keep in mind the risk factors and other cautionary statements in WeedMD’s disclosure documents filed with the applicable Canadian securities regulatory authorities on SEDAR at www.sedar.com. The risk factors and other factors noted in the disclosure documents could cause actual events or results to differ materially from those described in any forward-looking information.
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