Marapharm Ventures to acquire Washington pot business
2016-03-10 09:11 ET - News Release
Shares issued 35,348,698
MDM Close 2016-03-09 C$ 0.28
Mr. Les Kjosness reports
MARAPHARM ACQUIRES OPERATING MARIJUANA BUSINESS IN WASHINGTON STATE
Marapharm Ventures Inc. has furthered its interests in the United States marijuana space and entered into an agreement for the acquisition of a licensed operating, production (cultivation) and processing (production) marijuana business located and operated in Whatcom county, Washington. The acquisition includes two marijuana licenses for production and processing, inclusive of all operating assets (the "Interests") from a private Washington State licensed marijuana enterprise. The licenses were granted to the Washington private company and the designated license holder by the State of Washington under Washington State initiative I502 in regards to the acquisition of a tier 3 production and processing license. The transferring of the licenses will be initiated to Marapharm's designated license holder on closing, expected on or before April 29, 2016, in accordance with Washington State marijuana legislation and regulatory requirements. Medical and recreational marijuana use is legal in Washington State.
The acquisition complements the Company's business strategy to expand its business footprint within the U.S. emerging marijuana markets and the rapidly increasing number of legalized medical and recreational jurisdictions in the United States. Pursuant to press releases, February 19 and March 8, 2016, Marapharm has acquired two medical marijuana licenses, an option to purchase an additional medical marijuana license, and owns 5.9 acres of land associated with the option in Nevada. The portfolio combined with the Washington State acquisition will result in approximately 303,000 square feet of U.S. marijuana licenses.
The terms of the agreement to acquire the Interests are from a third party acting as agent and a Washington State resident acting as a finder. The marijuana production license consist of a 21,000 square foot of marijuana canopy licence, with an additional option that can be received from the State for an additional 9,000 square feet of approved marijuana canopy coverage. The processing license has no limitations. The business has its operations in a 28,000 square foot building. The purchase price is for USD $1,500,000, comprised of a cash portion of USD $1,300,000, and the balance of the purchase price to be paid from the issuance of USD $200,000 treasury shares of the Company to be issued at CDN $0.28 per share, with exchange calculated effective March 10, 2016, and subject to applicable regulatory hold periods. The Company intends to finance the acquisition through a proposed debenture financing with a third party, subject to completion of negotiations. The Company has also advanced negotiations with the property owner of the Washington private business by way of a term sheet for a long term lease which includes a six month option to purchase the entire property which includes the private marijuana business and multiple buildings for USD $4,500,000. The transaction and financings are subject to applicable Canadian and U.S. and State statutory, regulatory, and compliance laws, and approvals, transfers and State security deposits as required.
Les Kjosness, CEO reported, "We are excited about this latest step in our corporate development in Washington. The business in Washington is relatively new. During the application and construction period the facility produced revenue of nearly $300,000 while operating from just 1,000 square feet of a 28,000 square foot building. Final occupancy permits were granted by the State to the Washington private company which now allows Marapharm to proceed to fund the final improvements to maximize growth and revenue. With the expertise of our Washington grower and his team, and an immediate escalation of planting, we are expecting the Company's first revenues a few months from now. Monthly revenues of marijuana sales in the State are posted on the Washington Liquor Board web site and operations with similar build-outs or footprints of canopy coverage produce monthly revenues in excess of $1,000,000 per month."
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