- The
acquisition of HemPoland accelerates opportunities for growth in the
European market as part of TGOD’s international strategy
- The
company has received medical sales licensing for its Ancaster, Ontario,
facilities – one of many sites where TGOD aims to cultivate cannabis
products
- The
company recently closed a $75 million bought deal financing to further its
expansion plans in Latin America and Europe
Cannabis company The Green Organic Dutchman Holdings Ltd.
(TSX: TGOD) (OTCQX: TGODF) has announced the acquisition of HemPoland and the
closing of a new bought deal financing, part of several recent developments
demonstrating the company’s strong commitment to international expansion and
the provision of immediate accretive revenue. The HemPoland acquisition has
already received approval from the Toronto Stock Exchange (http://ibn.fm/A4JWg).
According to The Green Organic Dutchman CEO Brian Athaide,
the transaction is a key milestone in the company’s long-term acquisition
strategy. It delivers immediate revenue to shareholders while opening up a new
vertical for the company. It also provides evidence of the company’s growth
toward its goal of having operations in 12 countries on three continents by the
end of the year.
TGOD recently announced efforts to boost its number of
dispensaries in Jamaica to five by early next year and to launch cultivation on
land leases there by the end of this year. The company also expects approval
from authorities in Denmark later this year to begin cultivation there, and it
is pursuing research and development facilities in Denmark as well, according
to an update to investors issued this month (http://ibn.fm/PKSUt).
The company is also seeing progress on Canadian cultivation
facilities in Hamilton, Ontario, and Valleyfield, Quebec, where it expects
to begin growing next year, and it has received a medical sales license from
Health Canada for its Ancaster, Ontario, facility (http://ibn.fm/v0Lnl), where it
expects to begin selling to medical patients in January and, shortly
thereafter, to the adult recreational use market.
“As we prepare for our Founders Club product launch in
January 2019, this is a critical step in our path to becoming the global
leading organic cannabis brand,” Athaide stated in the news release.
TGOD’s investor update also noted that the company has
established additional $75 million bought deal financing that will be
used to advance its expansion in Latin America and Europe.
“With potential consumer populations of nearly 750,000,000
and 650,000,000 respectively, these markets represent a key development
opportunity in the Company’s global growth plan,” the report states.
TGOD paid $7.75 million in cash and also issued nearly two
million restricted shares as part of the HemPoland transaction. The shares will
be escrowed for a three-year period starting from the closing date of the deal.
There is an additional contingent consideration of up to that million deferred
shares that is dependent on an EBIDTA achievement of $32 million on behalf of
HemPoland by 2021.
The Green Organic Dutchman is also set to invest $10.3
million in HemPoland’s innovative product development practices.
HemPoland is the first private entity in Poland to obtain a
license for the growing and manufacturing of cannabis sativa. The company
focuses on innovative solutions and its flagship product, called CannabiGold,
is being exported to various European countries like the Netherlands, Germany,
Switzerland and the United Kingdom.
The European cannabis market offers excellent opportunities
for growth. It features over three quarters of a billion people, and HemPoland
already has a well-established position as a leading manufacturer and marketer
of premium CBD oils within this market.
Cannabis and cannabis oil products have been offered for
sale legally in various European countries, including France, Luxembourg,
Austria and others, since 2017, according to the European Monitoring Centre for
Drugs and Drug addiction (http://ibn.fm/eGpSh).
Currently, Europe has rather restrictive Union and national policies, but there
are signs that the European market will begin opening up soon.
Germany’s Supreme Court made it easier for patients to
qualify for prescriptions for cannabis-based products in 2016 (http://ibn.fm/fd57k), leading to
a rapid hike in the number of patients receiving such treatment – from a few
hundred to 13,000 in 2017. If all EU countries pass such legislation, Europe is
predicted to become the largest legal cannabis market in the world, a recent
report suggests (http://ibn.fm/kUx6l).
In 2018, more than six countries announced new legislative
frameworks aimed at simplifying access to cannabis-based products. It is
anticipated that, by 2028, the volume of Europe’s cannabis market will reach
115.7 billion euros.
By acquiring HemPoland, TGOD will gain access to this
significant potential clientele via the Polish company’s well-established
distribution network, as well as to its state-of-the-art hemp oil extraction
technology and the premium CannabiGold brand.
The Green Organic Dutchman is licensed to cultivate medical
cannabis and focused on growing high quality, organic cannabis via sustainable
principles. The company currently has a funded capacity of nearly 375,000
pounds and is building cultivation facilities in Canada and Jamaica totaling
almost 1.4 million square feet.
For more information, visit the company’s website at www.TGOD.ca
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