BioHarvest Sciences Inc. (CSE: BHSC) (the “Company”, “BioHarvest”) announces today its growth strategy supported by a major manufacturing agreement allowing the Company to reap the benefits of its BioFarming technology in multiple verticals. The completion of the merger agreement last March, allows the Company to address both the Cannabis multi-billion market potential as well as the $US150 Billion Nutraceuticals market.

Today the company’s CEO, Mr. Ilan Sobel, unveiled the growth strategy and the route to market for both verticals showing the importance of deploying a combined B2B and B2C approach. Together these two routes to market are expected to enable the Company to create a healthy balance between revenue and profit margins and are projected to yield an estimated revenue of US$2.5-US$3.5 Million in 2021, with the Superfruits Nutraceutical vertical expected to be cash positive in 2021, and the combined business of Nutraceuticals and Cannabis expected to turn cash positive in 2022. Importantly, the Company demonstrated its new commercial capabilities as well as announced a major manufacturing agreement with Sugart, a leading food manufacturer in Israel. This agreement is currently in a form of a binding MOU setting definitively the financial and the principal terms. This binding MOU will be replaced by a definitive agreement when the additional terms are added in the course of the next 3-4 weeks.


Under the terms of the agreement, BioHarvest Sciences Inc. will invest in the required Capital Equipment for its BioFarming technology as well as appropriate Capital Upgrades needed for Sugart’s existing manufacturing facility. The cost of this capital equipment and capital upgrades is approximately 30% of what was originally estimated, as a result of the parties developing an improved industrial manufacturing blue-print for its BioFarming technology, a blue print which is applicable for both our Nutraceutical and Cannabis Business Verticals. This new manufacturing blueprint is expected to result in a significant reduction in the Company’s Cost of Goods Sold as it brings the growing of cells, drying of cells and encapsulation of its finished product all underneath one roof. The manufacturing facility is expected to be fully operational in early Q3, 2021 in order to support the expected increased demand for products like VINIA®.

The facility located in Yavne; Israel will be leased for a Lease Period of 10 years at a rent of $40,000 NIS (approximately $16,000 CAD) per month.

Sugart Ltd shall be solely responsible for all aspects and requirements related to the construction of the new manufacturing facility as well as providing all the services required in the end to end manufacturing of the finished product. Further Sugart Ltd will also provide other critical support services such as logistics, warehousing and procurement. In return for their services, Sugart will be reimbursed for all their costs incurred and will earn a service fee equivalent to approximately 10% of the Total COGS. The agreement includes a provision granting Sugart with the right of first refusal for additional capacity to be built up to a maximum of 60 tons per year and a certain buy back provision exists for the Company of this right of first refusal, should the company wish to manufacture elsewhere.

“This partnership unlocks the potential of the disruptive BioFarming technology by bringing the entire cells growth process under one roof and is expected to reduce costs by an estimated 70% from the current manufacturing costs,” said Mr. Ilan Sobel and added, “It gives the company the ability to provide competitive market fit pricing for CPG companies, driving significant scale in the business and enabling high gross profit margins to be earned in B2C channels.”

Ori Haan, owner and CEO of Sugart Ltd. added “I am excited to create a long-term partnership between Sugart and BioHarvest. Through this partnership we are combining best in class

manufacturing capability with the disruptive BioFarming technology of BioHarvest to bring wellness products to consumers”.

In conjunction with this agreement BioHarvest will be granting Mr. Ori Haan 1,000,000 warrants with each exercisable to purchase a common share at $0.15 for a term of 24 months and paying Mr. Roberto Chait a finder’s fee of 1,600,000 warrants with each exercisable to purchase a common share at $0.15 for a term of 18 months.

About BioHarvest Sciences Inc.

Based in Vancouver BC, BioHarvest Sciences Inc. is the developer and exclusive owner of the proprietary and patent protected Biofarming technology. It is the first and only industrial large-scale plant cell growth technology capable of directly and constantly producing the active plant ingredients without the necessity to grow the plant itself. The technology has been already validated by Vinia™, the red grapes cells functional food/dietary supplement produced and sold by BioHarvest. By adapting this technology to the Cannabis plant, and building adequate cells production capacity, BioHarvest Sciences Inc.’s objective is to become the leading supplier of Cannabis for both the medicinal and recreational legal use. See the following hyperlink for a visual description of our Biofarming technology: BHSC’s Biofarming Technology

BioHarvest Sciences Inc.
Dr. Zaki Rakib
President and Chairman of the Board

For further information, please contact:
Dave Ryan, VP Investor Relations & Director
Phone: 1 (604) 622-1186
Email:
dave@bioharvest.com

Forward-Looking Statements Information set forth in this news release contains forward-looking statements that are based on assumptions as of the date of this news release. These statements reflect management’s current estimates, beliefs, intentions and expectations. Although the Company believes the expectations expressed in its forward-looking statements are based on reasonable assumptions, such statements should not be in any way construed as guarantees of the ultimate expected outcomes.

They are not guarantees of future performance. The Company cautions that all forward-looking statements are inherently uncertain, and that actual performance may be affected by a number of material factors, many of which are beyond the Company’s control, in particular the estimates are based on market acceptance of the Company’s products, the availability of financing required which is not assured, licensing being available to produce and sell Cannabis products in commercial amounts, costs anticipated may vary based on changes made by suppliers and factory shut downs, delays in receipt of components from manufacturers may increase projected timelines. Accordingly, actual and future events, conditions and results may differ materially from the estimates, beliefs, intentions and expectations expressed or implied in the forward-looking information. Except as required under applicable securities legislation, the Company undertakes no obligation to publicly update or revise forward-looking information.

Neither Canadian Securities Exchange nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of this release.

Source

Cannabis Market Update: Q3 2020 in Review

Click here to read the previous cannabis market update.

During the first few months of investment time in 2021, cannabis faced some volatility alongside optimism about federal changes in the most important market for the drug.

The cannabis business found its stride during Q1 thanks to policy change signals and consolidation.

To find out more, the Investing News Network (INN) asked experts about progress in the market during the first major period of the new year, and which developments investors should watch out for.

 

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Cannabis market update: New York and US potential boost operations

New York state’s legalization of recreational cannabis was a huge Q1 announcement that added pressure to the US federal government when it comes to cannabis policy, said George Mancheril, co-founder and CEO of Bespoke Financial, a debt financing business with a particular focus on servicing cannabis businesses.

“It’s going to add to the chorus of voices in the federal scene to basically move sooner rather than later,” he explained to INN.

Following the US election in 2020, the momentum for cannabis businesses went on the upswing, as did company valuations, with the idea of expansion at the heart of it all, according to Mancheril.

Before starting Bespoke Financial, Mancheril learned from traditional investment banks, working in the lending, fixed income and debt markets with Goldman Sachs (NYSE:GS) and Guggenheim Partners.

Nawan Butt, portfolio manager with Purpose Investments, agrees with Mancheril. The financial expert told INN the ongoing legalization process seen in the US market is leading to expansion.

“It’s becoming more of a national move, then small pockets of proliferation. That’s very exciting about cannabis right now,” said Butt, who co-manages the Purpose Marijuana Opportunities Fund (NEO:MJJ).

This proliferation effect is causing a change in valuations and enthusiasm for US-based operations. Mancheril told INN that by the end of Q1, multi-state operators (MSOs) had raised approximately US$3.3 billion.

The cannabis lender said he sees the industry as having grown from the woes of 2019; it is now undergoing a return to form as excitement about the US opening up increases.

The expert explained that there is likely to be a windfall of capital in the wake of major federal changes in US cannabis policy, although the timeline for these changes is becoming increasingly hard to predict.

Leading up to that capital influx, Mancheril said he wants to see operators really drill down on the value of desired assets and whether they make sense.

“What I’d hope is that we continue to see bullish sentiment, but with some measure of responsibility, and let’s not just get over ahead of ourselves,” Mancheril told INN. “The idea is let’s minimize the volatility and continue growing responsibly.”

 

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As far as struggles go, Butt explained that the cannabis industry has cemented itself as a growth-type sector, and as such there are macro pressures affecting the way these assets operate.

“We’ve seen this preference for cash flows at growth in the current or in the near future, rather than in the far future, and that’s what we’re seeing as far as valuations go in the broad market,” Butt said.

Cannabis market update: Volatility continues to rule as industry foundations build

Despite the industry’s potential and the growing pains it has gone through as a whole in both the US and Canada, volatility remains a key factor in the cannabis investment scene.

Butt explained that the current shareholder base, which is dominated by hedge funds and retail investors, still lacks enough institutional support to avoid the day-to-day volatility cannabis has come to be known for.

These two investor groups, Butt said, can be easily spooked and excited by the news of the day when it comes to their investments.

“A lot of these institutions’ strategies are not about short-term profits, but they’re about long-term sustainability of the businesses themselves,” Butt said.

“That’s why you see a lot of volatility in the space, and that’s essentially what we’ve seen over the past, I’d say, three to two months as well,” he added.

That means investors shouldn’t expect an end to volatility anytime soon.

“It’s not about whether we continue to expect volatility, because we do,” Butt said. “We really think that the volatility will be taken out when the shareholder base becomes more institutional, but it’s really about understanding why there is volatility in the first place.”

Cannabis market update: Canadians talk up US business, but questions remain

A surge of mergers and acquisitions has taken over the Canadian cannabis sector recently as more producers see potential in America.

One of the biggest announcements in this regard came when Organigram Holdings (NASDAQ:OGI,TSX:OGI) secured a C$221 million investment deal from British American Tobacco (NYSE:BTI,LSE:BATS).

Using the funds, the two will work in tandem to develop new branded products designed for the international stage, including in the US. Organigram CEO Greg Engel previously told INN that the US represents a critical opportunity for Canadian companies, but the entry point isn’t as clean as it could be.

 

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While the long-term potential may be exciting for investors, Butt told INN he’s still unsure how the approach will work for Canadian companies.

The Purpose Investments expert said there will be plenty of space for the biggest Canadian names to pursue US market entries, beyond the initial hemp-derived CBD moves some operators have mde, since the US represents the biggest market in the world.

“But there’s just way too many unknowns right now to say exactly what that participation is going to look like, or when that participation will happen,” he said.

“What we do know is that currently the US MSOs are in a wonderful sort of position to expand on their market leadership that they have. And it will be tough for Canadians to come in and compete with them,” Butt said.

Canadian players still retain the upper hand at times in terms of valuation, which is confusing for both Butt and Dan Ahrens, chief operating officer and portfolio manager at AdvisorShares.

“The performance in quarterly earnings of US companies has been rather spectacular. They’ve knocked it out of the park in most instances,” Ahrens told INN.

Butt praised the recent performance reports from MSOs across the board, pointing to year-over-year growth lines and projections for continued positive performance. In his view, share prices still don’t reflect company value. “Those are really being discounted at this point,” Butt told INN.

“We’ve seen the Canadian licensed producers be really hot stock performance-wise, outpacing the US (MSOs), and I’ll say it’s rather nonsensical to me,” said Ahrens, who oversees the AdvisorShares Pure Cannabis ETF (ARCA:YOLO) and the recently launched AdvisorShares Pure US Cannabis ETF (ARCA:MSOS).

Cannabis market update: Investor takeaway

The cannabis investment proposition finds itself at an interesting moment in time, as the entire sector eagerly awaits confirmation in the US at the federal level.

While for the Canadian companies waiting on the sidelines, this development may feel like a major necessity to address current financial struggles, for US-based operators, the heat around the corner could represent future positivity for already thriving operations.

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All interested parties can join the conference call by dialing 1-888-231-8191 or 1-647-427-7450, conference ID: 4880609. Please dial in 15 minutes prior to the call to secure a line. The conference call will be archived for replay until May 20, 2021 . To access the archived conference call, please dial 1-855-859-2056 and enter the encore code 4880609.

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Ayurcann Holdings Corp. ( CSE: AYUR ) (the “ Company ” or ” Ayurcann “), a Canadian extraction company specializing in the processing of cannabis and hemp for the production of oils and various derivative products, is pleased to unveil further details of its Phase 2 expansion plans.

Ayurcann has commenced trading on the Canadian Securities Exchange (” CSE “) on April 8, 2021 and subsequently announced a private placement of up to $500,000 (” Financing “), as per the Company’s press release dated April 12, 2021. The proceeds of the Financing are intended to be used to further pursue Phase 2 of the expansion of the production capacity of the Company’s Pickering facility.

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