- New
Canadian assets to be listed on the Toronto Stock Exchange and Nasdaq
- Sunniva’s
U.S. assets to remain listed on the Canadian Securities Exchange (CSE)
under the ticker symbol ‘SNN’
- Two-year
contract signed with industry leading Canopy Growth Corp. for 45 percent
of production at Sunniva Canada Campus in British Columbia
- Sunniva
anticipates launching its first line of Sunniva-branded products in the
U.S. in Q3 2018
Sunniva Inc. (CSE: SNN) (OTCQX: SNNVF), a
vertically integrated medical cannabis company headquartered in Vancouver,
Canada, and operating in the world’s two largest cannabis markets – Canada and
California – is reaping positive attention with the news that the company
intends to spin off its Canadian assets. The proposal, which would create a new
entity listing on the Toronto Stock Exchange (TSX) and Nasdaq, will leave
Sunniva’s U.S. assets to trade on the Canadian Stock Exchange, the company
announced in a recent press release (http://ibn.fm/9gYmK).
Canadian assets in the proposal, designed to unlock the
underlying value of Sunniva’s assets on both sides of the border, include:
- Sunniva
Medical Inc., which is building the 740,000 square foot, state-of-the-art
greenhouse Sunniva Canada Campus in British Columbia. The facility is
designed to produce an estimated 100,000 kilograms of dried cannabis per
year (http://ibn.fm/mCKW3).
Plans for the facility include the production of pharmaceutical-grade
cannabis products such as oils, capsules, tinctures, patches, lotions and
other consumer goods, Sunniva CEO Dr. Anthony Holler told Canada’s Global
News in a June 4 interview (http://ibn.fm/Iq68F). Canopy Growth Corporation has
already signed an agreement to take-or-pay approximately 45 percent of
Sunniva’s annual production capacity there.
- Natural
Health Services Ltd. (“NHS”) owns and operates a network of seven
patient-centric clinics in Canada specializing in medical cannabis under
the Access to Cannabis for Medical Purposes Regulations. NHS clinics are
staffed by physicians, nurses, educators and patient care representatives
to provide consultation, medical cannabis education and an introduction to
the products and strains available through licensed producers across
Canada. NHS recently opened a new clinic in Windsor, Ontario (http://ibn.fm/k40qo).
Remaining listed on the Canadian Securities Exchange under
the ticker symbol ‘SNN’ are the following Sunniva assets:
- CP
Logistics, LLC (“CPL”) operates the Sunniva California Campus that is
currently under construction in Cathedral City (http://ibn.fm/4gI9g). The
489,000 square feet of purpose-built greenhouse facilities include a
flagship onsite dispensary with a distribution license. CPL also operates
a licensed extraction facility in Cathedral City, which began operations
in June 2018, and has attracted service agreements to manufacture
extracted products for significant brand partners in California. Plans
include launching the first Sunniva-branded products in the U.S. during Q3
of 2018.
- Full-Scale
Distributors, LLC provides custom, private-label vaporizers and
accessories to brand partners through the Vapor Connoisseur brand.
The spinout transaction, which is subject to various
conditions such as shareholder and exchange approval, has prompted comments
such as “an excellent value creation strategy” from Beacon Securities analyst
Doug Cooper (http://ibn.fm/xxJwc).
“We believe having unencumbered US assets is very important
and frees up the company to aggressively pursue an M&A strategy within the
largest cannabis market in the world (California),” the analyst said in an
update to clients on Tuesday (http://ibn.fm/A0NRf).
“SNN has a current EV of ~$220 million, which neither reflects the true value
of the US nor Canadian assets.”
Holler said creating a new Canadian company focused on Sunniva’s
Canadian assets is expected to “bring added visibility and additional analyst
coverage to our story and has the potential to attract institutional investors
that are currently unable to purchase stock on the CSE or purchase companies
holding US assets.”
For more information, visit the company’s website at www.sunniva.com
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