Emblem Corp. and GreenSpace Brands Partner to Launch New CBD-Infused Health And Beauty Line

Emblem (TSXV:EMC, OTC:EMMBF) (“Emblem”) and GreenSpace Brands (TSXV:JTR) (“GreenSpace”) are pleased to announce a strategic partnership to develop and commercialize cannabidiol (“CBD”) infused health and beauty products for the expected adult-use cannabis market. This groundbreaking partnership unites a highly-regarded consumer packaged goods (“CPG”) company with one of Canada’s most trusted licensed producers of medical cannabis.

The partnership will leverage GreenSpace’s expertise in consumer brand development and distribution to launch products infused with Emblem’s CBD extracts across a number of verticals including beauty, health and wellness, supplements, food and beverage. Each approved product will indicate it is “Powered by Emblem” to signify Emblem’s involvement. Expansion into edibles and consumables using cannabis CBD extracts will move forward when these additional products are permitted under applicable regulations, expected in 2019. Any CBD products will be produced and marketed in accordance with applicable Canadian laws and regulations.

“Emblem’s partnership with GreenSpace Brands is an industry first and represents an incredible opportunity to capitalize on the growing CBD market in Canada,” said Nick Dean, CEO, Emblem Corp. “Through this partnership, we combine GreenSpace’s product innovation and brand building leadership with Emblem’s high-quality cannabis products, licensed manufacturing facility and established distribution channels. Together we aspire to become a market leader in delivering high-quality CBD health and beauty products to Canadians.”

CBD-infused products are a growing consumer trend gaining substantial media attention. CBD is one of the most common cannabinoids in cannabis or hemp that is known for a variety of medicinal qualities without the psychoactive “high” that can be associated with tetrahydrocannabinol (THC). CBD-infused products are part of the large supplements market which reached US$41.4B in the United States in 2016. According to a 2017 report from the Brightfield Group, the hemp-derived CBD market will grow nearly 10-fold to US$1.6 billion between 2016 and 2021.

“Product innovation and strong distribution are core pillars for both GreenSpace and Emblem, making this a perfect partnership for applying GreenSpace’s successful model to the cannabis space,” said Matthew von Teichman, President and CEO, GreenSpace Brands. “This partnership allows us to enter the Health and Beauty category through CBD focused products, which we strongly believe will be a massive category for a long time to come.”

Terms of the partnership
Under the terms of the agreement, GreenSpace will commit to a five-year exclusive CBD supply agreement with Emblem. In addition, Emblem will make a $2 million investment in GreenSpace consisting of $1 million in common shares at a 20-day volume weighted average price of $0.98 per share and $1 million in unsecured convertible debentures to fund the start-up of GreenSpace’s CBD business. The debentures will mature five (5) years from the closing date and will automatically convert into common shares upon the satisfaction of certain conditions (each, a “Milestone”) at a conversion price equal to the lesser of: (i) $1.05; and (ii) the twenty (20) day volume-weighted average price of the common shares on the TSX Venture Exchange (the “Exchange”) on the date the applicable Milestone is achieved, provided that the conversion price shall not be less than $0.94 and that the automatic conversion will be deferred if the market price is less than $0.75 at the time the Milestone is met. Emblem will earn a 4% royalty on all hemp-based CBD product sales and a 7% royalty on all cannabis-based CBD product sales.

In addition to the Emblem investment, GreenSpace has also received a $1 million strategic equity investment from a key supplier who will assist with maximizing commodity purchasing. The investment will be used for general working capital purposes.

The transactions contemplated herein are subject to a number of customary closing conditions, including, but not limited to, Exchange approval.

About GreenSpace
GreenSpace is a Canadian-based brand ideation team that develops, markets and sells premium natural food products to consumers across North America. GreenSpace owns Rolling Meadow Dairy, Canada’s first grass fed dairy business, Life Choices, convenience meat products made with grass fed and pasture raised meats without the use of added hormones and antibiotics, Love Child, a producer of 100% organic food for infants and toddlers made with the purest, natural and most nutritionally-rich ingredients, Central Roast, a clean snacking brand featuring a wide assortment of nut and seed mixes, Kiju, the Canadian market leader in the shelf stable organic juice segment, Cedar, the leaders in the Canadian Cold Press Juice category and the most recently acquired brand, Go Veggie, one of the leaders in the US plant based dairy market. All brands are wholly owned and retail in a variety of natural and mass retail grocery locations across Canada.

About Emblem
Emblem, through its wholly-owned subsidiary Emblem Cannabis Corporation, is a fully integrated licensed producer and distributor of medical cannabis and cannabis derivatives in Canada under the Access to Cannabis for Medical Purposes Regulations (ACMPR). Emblem’s state-of-the-art indoor cannabis facility and research and development laboratory is located in Paris, Ontario. Led by an experienced management team of healthcare executives, accomplished marketing professionals, and cannabis experts, Emblem is focused on driving shareholder value through product innovation, brand relevance, and access to patient and consumer channels. Emblem is also the parent company of GrowWise Health Limited, one of Canada’s leading cannabis education services. Emblem trades under the ticker symbol EMC on the TSX Venture Exchange.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This news release contains certain forward-looking statements and forward-looking information (collectively referred to herein as “forward-looking statements”) within the meaning of applicable Canadian securities laws. All statements other than statements of present or historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “anticipate”, “achieve”, “could”, “believe”, “plan”, “intend”, “objective”, “continuous”, “ongoing”, “estimate”, “outlook”, “expect”, “may”, “will”, “project”, “should” or similar words, including negatives thereof, suggesting future outcomes. Management of the Emblem and GreenSpace (collectively, the “Companies”) believe the expectations reflected in such forward-looking statements are reasonable as of the date hereof but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. Various material factors and assumptions are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking statements. . The forward-looking statements in this release are based on certain assumptions and involve known and unknown risks and uncertainties and other factors that could cause actual events to differ materially from current assumptions and expectations, including, but not limited to, that: the conditions to the completion of the investments and supply agreement contemplated herein will be satisfied, the investments and supply agreement contemplated herein will be completed on the terms substantially described in this release, that applicable regulatory, exchange and third party approvals will for the transactions described herein will be obtained, that the CBD adult-use market will open in the time frame and in the manner contemplated herein, and that customers will respond positively to the Companies’ new product lines. Those material factors and assumptions are based on information currently available to the Companies, including data from publicly available governmental sources as well as from market research and industry analysis and on assumptions based on data and knowledge of this industry which the Companies believe to be reasonable. However, although generally indicative of relative market positions, market shares and performance characteristics, such data is inherently imprecise. While the Companies are not aware of any misstatement regarding any industry or government data presented herein, the anticipated recreational cannabis industry involves risks and uncertainties and is subject to change based on various factors.

Forward-looking statements are not a guarantee of future performance and are subject to and involve a number of known and unknown risks and uncertainties, many of which are beyond the control of the Companies, which may cause actual performance and results to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the risks identified in both Emblem’s December 31, 2017 Management’s Discussion and Analysis, and GreenSpace’s March 31, 2018 Management’s Discussion and Analysis, which have been filed with the Canadian Securities Administrators and available on www.sedar.com. Any forward-looking statements are made as of the date hereof and, except as required by law, the Companies assume no obligation to publicly update or revise such statements to reflect new information, subsequent or otherwise.

Neither the Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this Press release.

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Source: globenewswire.ca