Geyser Brands Inc. (TSXV:GYSR)(“Geyser Brands” or the “Company”) is pleased to announce that, further to the Company’s news release dated February 11, 2019, the Company has entered into a definitive agreement (the “Agreement”) in respect of the previously announced acquisition of Solace Management Group Inc. (“Solace”), a private corporation existing under the laws of British Columbia (the “Proposed Transaction”).

The Company’s CEO, Andreas Thatcher states that “[T]his is a transformational strategic acquisition for Geyser, which will establish ourselves as a leading provider of health-focused hemp and CBD wellness products. With the constant evolution of the national and international hemp and CBD landscape, by combining the expertise in innovation and development with Solace’s expertise and market recognition, we will be well placed to capitalize on what is predicted to be a multibillion-dollar industry.”


About Solace

As reported in previously disseminated news releases, Solace leverages its brands, intellectual property and proprietary formulations in the hemp and CBD markets by licensing distribution and production arrangements. Solace’s brands and assets include among other things, the Apawthecary Pets line of products which are leading all-natural hemp-based pet treats with formulations for human grade, all-natural pet treats, salves and oral drops. Apawthecary Pets products are currently being sold in pet stores and veterinarian clinics across Canada, including Bosley’s, PetLand, Pharmasave, Bukerfields, Shoppers Drug Mart, Global Pet Foods and Pet Planet to name a few. Solace’s product portfolio currently comprises of 23 products and 57 SKU’s of both pet and consumer healthcare goods. All products are currently utilizing organic, unrefined, cold-pressed hemp seed oil extracts. As part of the Solace’s continued growth, it has recently moved to a new 7,500 sq. ft. facility built to Good Manufacturing Practices. The new facility is anticipated to increase Solace’s production capacity significantly in order to meet the growing demand and will allow the development of new products and formulations.

As part of the Proposed Transaction, Solace will be terminating its licensing arrangement with its Canadian manufacturer so as to bring manufacturing and distribution within Solace in order to maximize revenues. Solace’s licensing arrangement with its United States manufacturer is currently on hold with no operations or revenue generated until such time as the manufacturer has obtained all necessary governmental and regulatory approvals in compliance with all applicable laws. Solace generated unaudited licensing revenues of $428,196 for the fiscal year ended September 30, 2018, compared to $591,167 for the fiscal year ended September 30, 2017. Gross margin was 100% and 21% respectively. Net income for Solace was $266,187 and $1,448 respectively. Retained earning were $213,626 and $(261)respectively. Solace’s Canadian manufacturer generated unaudited revenues of $1,478,862 for the fiscal year ended September 30, 2018, compared to $304,109 for the fiscal year ended September 30, 2017. Gross margin was 39% and 21% respectively. Net income was $293,023 and $(6,386) respectively. Retained earnings were $286,637 and $(6,286)respectively.

Transaction Summary

The Agreement provides that the Company will acquire all of the issued and outstanding shares of Solace (the “Purchased Shares”) from the shareholder of Solace (the “Solace Shareholders”) for an aggregate purchase price of $3,900,000 (the “Purchase Price”), subject to adjustments as outlined in the Agreement.

The Purchase Price will be payable by way of (1) an aggregate cash payment of $400,000 (the “Cash Payment”), payable by way of a promissory note (the “Promissory Notes”) delivered to each of the Solace Shareholders upon closing in proportion to the number of Purchased Shares owned by such Solace Shareholder against the aggregate number of the Purchased Shares (the “Principal Amount”), and (2) in respect of the balance of $3,500,000, by the issuance of 5,833,333 common shares (the “Consideration Shares”) of the Company at a deemed price of $0.60 per common share, subject to Exchange approval (the “Share Payment”). As with the Cash Payment, the number of Consideration Shares each Solace Shareholder shall receive upon closing will be in proportion to the number of Purchased Shares such Solace Shareholder owns against the aggregate number of Purchased Shares.

The terms of the Promissory Notes provide that the Principal Amount will be paid in full, without interest, on or before the first anniversary of the closing of the Proposed Transaction. The Company shall have the right to prepay all or any part of the Principal Amount at any time without notice, bonus or penalty. Furthermore, in the event the Company raises capital after the closing of the Proposed Transaction in the aggregate amount of $5,000,000 by way of one or more private placement financings, or other form of investment from arm’s length third parties, the unpaid balance of the Principal Amount will be immediately due and payable.

Certain Consideration Shares may be subject to escrow in accordance with Exchange policies and all Consideration Shares will be subject to a statutory hold period expiring 4 months and 1 date from the date of issuance. No finder’s fees are payable in connection with the Proposed Transaction. On completion of the Proposed Transaction, Solace will become a wholly owned subsidiary of the Company.

Although the parties have entered into the Agreement, there can be no assurance that the Proposed Transaction will be completed as proposed, or at all. The Agreement may be terminated by the parties in certain circumstances.

The closing of the Proposed Transaction remains subject to, among other things: (1) the Company being satisfied with its due diligence review of Solace; (2) the receipt of all necessary consents, including all necessary third party consents; (3) board approvals of Geyser and Solace, (4) approvals and authorizations including any applicable shareholder approval; (5) TSXV Exchange (the “Exchange”) approval; (6) satisfaction of any Exchange requirements; and (7) the satisfaction or waiver of conditions precedent and other customary closing conditions outlined in the Agreement. Closing of the Proposed Transaction is anticipated to take place within 5 business days after receipt of final acceptance from the Exchange.

The Company currently has 21,184,950 common shares issued and outstanding. Upon completion of the Proposed Transaction, and subject to any warrant or option exercise, the Company anticipates that it will have 27,018,283 common shares issued and outstanding.

Board Recommendations

The Agreement has been approved by the Disinterested Directors of the Company and recommends to the Company’s shareholders to approve the Proposed Transaction.

Shareholder Approval

As previously announced, the Proposed Transaction is not an “arm’s length transaction” as such term is defined in the Exchange’s Policy 1.1 and therefore constitutes a “related party transaction” as such term is defined in Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). Bradley D. Kersch (“Mr. Kersch”) is a director of the Company and is also a director and President of Solace. Mr. Kersch owns 23.48% of the Purchased Shares. Mr. Kersch along with other members of his family that are deemed to be “associates” of Mr. Kersch as such term is defined in the Exchange’s Policy 1.1, own 53.01% of the Purchased Shares. Mr. Kersch currently owns 1,826,434 common shares of the Company on a non-fully diluted basis, representing 8.62% of the issued and outstanding common shares in the capital of the Company on a non-fully diluted basis. On closing of the Proposed Transaction, Mr. Kersch will own 3,092,152 common shares of the Company on a non-fully diluted basis, representing 11.83% of the issued and outstanding shares in the capital of the Company. Mr. Kersch along with other members of his family that are deemed to be “associates” of Mr. Kersch as such term is defined in the Exchange’s Policy 1.1, will own 4,918,586 common shares of the Company on a non-fully diluted basis, representing 18.20% of the issued and outstanding shares in the capital of the Company. The Proposed Transaction would not result in a “Change of Control” or new “Control Person” as such terms are defined in the Exchange’s Policy 1.1.

In respect of the requirements of MI 61-101, the Company is relying on the exemptions from the formal valuation and minority approval required under MI 61-101. The Company is exempt from the formal valuation requirement of MI 61-101 in reliance of sections 5.5(b) and 5.5(e) as no securities of the Company are listed on the specified markets outlined therein and the current Control Person, as such term is defined in applicable securities laws, who own 25.96% of the current issued and outstanding common shares in the capital of the Company, supports the Proposed Transaction and (1) is not an interested party, (2) is at arm’s length to the interested party, and (3) supports the transaction. Additionally, the Company is exempt from minority shareholder approval of MI 61-101 in reliance of section 5.7(1)(c).

Although the Company is exempt under MI 61-101 in respect of minority shareholder approval and formal valuations, in accordance with the Exchange’s Policy 5.3, the Proposed Transaction constitutes a “reviewable transaction”, and, as the number of Consideration Shares issuable to “Non-Arm’s Length” parties exceeds 10% of the number of common shares issued and outstanding in the capital of the Company, the Exchange may require the Company to seek approval of a simple majority of the Company’s shareholders, excluding certain insiders. The Company will communicate the timing and conduct of such meeting in due course if required, or in the alternative, will seek written consent from the Company’s shareholders approving the Proposed Transaction as may be permitted by the Exchange.

As indicated in previously disseminated news releases, Mr. Kersch has disclosed to the other directors of the Company (the “Disinterested Directors”) his interest in Solace and the Proposed Transaction and as such, only the Disinterested Directors who are “independent” as such term is defined in MI 61-101 will be entitled to vote on any board resolutions, or make any decisions, to approve the Proposed Transaction.

ABOUT GEYSER BRANDS

Geyser Brands Inc. builds health-based hemp CBD consumer products in the Nutraceutical, Cosmetics, Food & Beverage and Pet sectors world-wide.  R&D investment in NanoFusion, a proprietary all-natural nanotechnology, delivers topical, cream, beverages and baked goods, oil, and tincture formulations with superior bio-availability and water-solubility.

Geyser Brands is a Health Canada approved Licensed Producer (“LP”) in Port Coquitlam, B.C. that holds a cultivation license and is anticipating its processing and sales licenses. Geyser Brands is exclusively focusing on leveraging these assets to provide the regulatory infrastructure for its global brands and distribution strategy, acquiring hemp- and plant-based brands and infusing them with new CBD product lines in jurisdictions where the therapeutic ingredient is legal. Geyser Brands’ proprietary NanoFusion technology surrounds oils and solves for the insolubility of CBD. Geyser Brands will utilize its 7,000 sq. ft. licensed facility in British Columbia for the manufacturing and distribution of its hemp and CBD-based products internationally.

For more information, visit Geyser Brands’ website at www.geyserbrands.com

On Behalf of the Board of Directors

Andreas Thatcher
Director and CEO

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

CAUTIONARY AND FORWARD-LOOKING STATEMENTS

This news release contains forward‐looking statements and forward‐looking information within the meaning of applicable securities laws. These statements relate to future events or future performance. All statements other than statements of historical fact may be forward‐looking statements or information. Forward‐looking statements and information are often, but not always, identified by the use of words such as “appear”, “seek”, “anticipate”, “plan”, “continue”, “estimate”, “approximate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe”, “would” and similar expressions.

Forward-looking statements and information are provided for the purpose of providing information about the current expectations and plans of management of the Company relating to the future. Readers are cautioned that reliance on such statements and information may not be appropriate for other purposes, such as making investment decisions. Since forward‐looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risks associated with the marijuana industry in general such as operational risks in growing; competition; incorrect assessment of the value and potential benefits of various transactions; ability to access sufficient capital from internal and external sources; failure to obtain required regulatory and other approvals and changes in legislation, including but not limited to tax laws and government regulations. Accordingly, readers should not place undue reliance on the forward‐looking statements, timelines and information contained in this news release. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information relating to Geyser is available at www.sedar.com.

For further information: Geyser Brands Inc. (TSXV:GYSR), #330 – 321 Water Street, Vancouver, B.C., V6B 1B8, www.geyserbrands.com | info@geyserbrands.com

Related Links

http://www.geyserbrands.com/

Click here to connect with Geyser Brands Inc. (TSXV:GYSR) for an Investor Presentation. 

Source: www.newswire.ca

Cannabis Market Update: Q3 2020 in Review

Click here to read the previous cannabis 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 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, where he worked on 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 seeing a return to form by way of the excitement for an ongoing opening process in the US.

The expert explained that there is likely to be a windfall of capital in the wake of major federal changes for 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.

 

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“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.”

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 environment 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 current 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 potential, 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 to work on 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 at the moment.

 

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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 Canadians 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 an increase to their already thriving operations.

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 Trulieve Cannabis Corp. (“Trulieve” or the “Company”) (CSE: TRUL) (OTC: TCNNF), a leading and top-performing cannabis company in the United States will release its first quarter 2021 financial results on Thursday, May 13, 2021 before markets open. Following the earnings release, management will host a conference call at 8:30 AM Eastern Time to review the financial results.

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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Appointment of Dr. Kelmendi, Assistant Professor of Psychiatry at Yale University and co-founder of the Yale Psychedelic Science Group, brings another experienced medical professional to Lobe’s advisory team.

 Lobe Sciences Ltd. (CSE: LOBE) (OTC Pink: GTSIF) (“Lobe” or the “Company”) is pleased to announce the appointment of Benjamin Kelmendi, MD, Assistant Professor of Psychiatry at Yale University School of Medicine, to its Scientific Advisory Board.

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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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