Marapharm Ventures (CSE:MDM) announced this week that that it has entered an agreement to acquire two provisional medical marijuana licenses from a Nevada based enterprise. The licenses allow for the cultivation and extract production of medical marijuana in the state.
As quoted in the press release:
The acquisition complements the Company’s business strategy to expand its business footprint within the U.S. emerging marijuana markets and the rapidly increasing number of legalized medical and recreational jurisdictions in the United States.
The terms of the agreement are for the initial acquisition of 75% of the Interests from a third party acting as agent. The provisional medical marijuana licenses consist of a 199,862 square foot cultivation approved license and a 16,320 square foot approved extract production license for edibles and all marijuana infused products. The purchase price is for USD $600,000, comprised of a cash portion of USD $300,000 principal due within one year at 4.5% interest payable monthly, and the balance of the purchase price to be paid from the issuance of USD $300,000 treasury shares of the Company to be issued at CDN $0.24 per share, with exchange calculated effective February 17, 2016 and subject to applicable regulatory hold periods. The Company has advanced approximately CDN $300,000 to the agent that will be offset to the purchase price on closing. The Company intends to complete negotiations on acquiring the remaining 25% Interests from the private corporation in the near future. The transaction is also subject to applicable statutory, regulatory, and compliance laws, and approvals, transfers and State security deposits as required.
Marapharm CEO, Les Kjosness, said:
We are excited about this latest step in our corporate development. Our business model is predicated on “early presence” within the newly re-regulated jurisdictions and aggressive expansion through acquisition of licensed operations. Through a combination of purchase and internal organic growth opportunities, we intend to expand our network of cultivation and production facilities in the United States. The rapidly changing political and business landscape for the entire sector presents an enormous opportunity for companies that are positioned to capitalize.