Wildflower Marijuana (SUN-CSE) March 25, '15 has entered into a letter of intent to form a licensing joint venture with a licensed marijuana producer in Washington state. The Joint Venture is being formed to develop Wildflower branded products which will then be marketed and distributed by our Joint Venture partner.
Pursuant to the Joint Venture, Wildflower will grant an exclusive license to manufacture, market and sell certain products, recipes, retail merchandise and promotional materials under the Wildflower brand in the State of Washington. As part of the agreement, Wildflower will issue 1,303,800 shares and pay $250,000 to its Joint Venture partner and contribute $1,100,000 in working capital to develop the brand. In consideration, Wildflower will receive a licensing fee equal to 20% of the gross sales of Wildflower branded products. Wildflower's joint venture partner has been in the marijuana business since 1998 and has operated a medical dispensary since 2012. The partner has agreed to negotiate in good faith combining these operations into the Joint Venture at such time as the law permits. Washington State is currently developing new rules regulating medical dispensaries. Further, Wildflower will work closely with its Joint Venture partner to implement Wildflower's Quality Assurance Program, Standard Operating Procedures and Good Manufacturing Practices to ensure the highest quality is produced for the Wildflower brand. As part of the transaction, Wildflower has agreed to pay a commission in accordance with regulatory guidelines.
As Wildflower's Joint Venture partner is currently producing and selling marijuana and related products, once the transaction closes Wildflower can immediately commence sales of Wildflower branded products. Work has already begun to identify new and unique product lines.
Pursuant to the Joint Venture all production from the license will be sold under the Wildflower brand. In Washington State, licensing requirements stipulate that all license holders and their shareholders, directors, officer and financiers be Washington State residents. While Wildflower cannot have any interest in any license in Washington State it can license its brand and provide consulting services to ensure all products associated with the Wildflower brand are of the highest quality.
The Washington market has approximately 370,000 cannabis users that consume approximately 175 metric tons (175,000,000 grams) of marijuana annually according to a study by the Rand Corporation, approximately double what was predicted by the State of Washington. In comparison, the legal Canadian medicinal market has approximately 59,000 registered patients. Wildflower's Joint Venture partner is an I-502 production and processing licensee specializing in the manufacturing of cannabis concentrates. These concentrates will provide the cornerstone to many of the Wildflower product lines such as infused edibles, drinks, oils and topical products to name a few. The production license is a Tier 2 license and is expected to produce approximately 1200 pounds of cannabis in 2015. The processing license allows Wildflower's Joint Venture partner to make other products from cannabis and distribute to all retail outlets in Washington State. Further, the processing license allows the holder to purchase wholesale cannabis from other producers.
President and CEO William MacLean states, "After many years of hard work I am excited that we will finally get to see the Wildflower brand available on store shelves. I know consumers will embrace the Wildflower product line which will transcend many different demographics. This is the first step in realizing our goal of making Wildflower a global marijuana brand. I would like to thank the Wildflower team for their diligence and commitment to making this vision a reality. In particular, Scott Walker VP of Corporate Development, whose vast contacts and expertise within the industry has opened the door to this and many more markets for the Wildflower brand." |
