Mota Ventures Corp. (CSE:MOTA, FSE:1WZ:GR, OTCPINK:PEMTF) (the “Company” or “Mota”) is pleased to announce that further to its January 10, 2020 news release, it has now acquired the intellectual property and trade names of Sativida from Sativida OU (Estonia). The Company will license both back to Sativida OU’s subsidiary, VIDA BCN LABS S.L. (collectively with Sativida OU, “Sativida”) in exchange for a royalty associated with the gross revenues generated by Sativida.

Sativida is an arms’-length producer and online retailer of cannabidiol (“CBD”) and branded CBD products in various jurisdictions in Europe, including Spain, Portugal, Austria, Germany, France and the United Kingdom. Sativida currently develops and retails a vast range of organic CBD oils and cosmetics across Europe and is in the process of expanding its distribution network internationally to include the United States. Sativida has become the number one search-ranked online retailer of CBD products in Spain and Mexico, and intends to continue its expansion into other countries in Europe and Latin America.


Through Mota, Sativida has an agreement with Unified Funding, LLC (“Unified”) for the expansion of the brand into the United States. Unified will provide assistance to Sativida with product sourcing, packaging, shipping, payment infrastructure and marketing in the United States. Unified Funding is an e-Commerce and technology company focused on serving U.S.-based and international consumers in the CBD and natural health products market. Powered by its proprietary technology platform, Unified has created an e-Commerce ecosystem to scale its brands through data analysis, strategic customer acquisition and supply chain management. Since June 2015, Unified has generated a database of over 4.5 million consumers and has facilitated over US$200 million in consumer transactions from more than one million paying customers.

“I am very excited to announce the acquisition of the Sativida brand. This gives Mota immediate entry into the European market and will be a building block for our planned European expansion. Mota’s U.S. operation, First Class CBD, is set to enter the European market and we expect the acquisition of the Sativida brand to expedite this expansion. Furthermore, our partnership with Unified Funding, LLC, the e-Commerce platform behind the success of First Class CBD, will allow us to bring the Sativida brand to the U.S. market as well,” stated Ryan Hoggan, CEO of the Company.

Noah Laith, founder of Sativida, commented, “Joining Mota is a major step for Sativida that will provide access to the capital, connections and infrastructure necessary to grow our business in Europe and internationally.”

Pursuant to the previously announced binding agreement with Sativida dated January 9, 2020 (the “Transaction Agreement”), the Company was granted the right to acquire Sativida in stages (the “Transaction”), at the discretion of the Company, as certain corporate and intellectual property registrations were completed. To accomplish this, the Company set up a wholly-owned Spanish subsidiary (“Spanish Subco”) and coordinated the registration of various intellectual property and trade names associated with business operations of Sativida.

The Company, through Spanish Subco, has now completed the acquisition of the intellectual property and trade names of Sativida in Spain, and will license both back to Sativida in exchange for a royalty associated with the gross revenues generated by Sativida. Pursuant to the Transaction Agreement, the Company also holds the right to acquire, through Spanish Subco, all of the outstanding share capital of Sativida at any time for no additional consideration.

Consideration for the Transaction is made up of an initial component of €2,000,001 (the “Consideration”) and an earn-out component made up of three milestone payments based upon the revenue of Sativida (each, a “Milestone Payment”). The Consideration was paid in 5,496,221 common shares of the Company (the “Consideration Shares”) at a deemed price of $0.5689 per share. Each Milestone Payment will be based on a 400% multiple of Sativida’s revenue until the aggregate of the Initial Consideration and Milestone Payments reaches €4,000,000, at which point the multiple will be reduced to 100%. In no event will the combined Milestone Payments and the value of the Initial Consideration exceed €15,000,000. Payment of the Milestone Payments will be satisfied by the Company issuing common shares (“Milestone Shares”) to Sativida. The total number of Milestone Shares issuable to Sativida will be determined by dividing the amount due by the volume weighted average closing price of the Company’s common shares on the Canadian Securities Exchange in the ten trading days prior to the day that the Milestone Payment is due.

The Consideration Shares and the Milestone Shares will each be subject to a 36-month pooling arrangement such that 10% of the Consideration Shares, or the Milestone Shares, as applicable, will be released from escrow on upon their issuance, with an additional 15% being released every six-months thereafter until all Consideration Shares or all Milestone Shares, as applicable, are released.

As part of the Transaction, Mota Ventures will enter into employment contracts with certain employees of Sativida and will provide an option pool that may be divided among the employees of Sativida equal to €60,000 in stock options of Mota Ventures for every €1,000,000 in revenue that Sativida earns, subject to certain conditions. Additionally, Mota Ventures has paid a 10% finder’s fee based on the total value of the Consideration Shares (528,072 common shares) to certain finders that assisted in introducing the Transaction to the parties as well as a 2% administrative success fee based on the total value of the Consideration Shares (105,614 common shares) to a consultant who assisted in the administration of the transaction.

The Company and Sativida are at arms’-length. The Transaction is not expected to result in a “reverse-takeover” or “fundamental change” for the Company under the policies of the Canadian Securities Exchange, or result in the creation of any new insider or control person of the Company. No changes to the board of directors, or management, of the Company are contemplated in connection with the Transaction.

About Mota Ventures Corp.

Mota is seeking to become a vertically integrated global CBD brand. Its plan is to cultivate and extract CBD into high-quality value-added products from its Latin American operations and distribute it both domestically and internationally. Its existing operations in Colombia consist of a 2.5-hectare site that has optimal year-round growing conditions and access to all necessary infrastructure. Mota is looking to establish sales channels and a distribution network internationally through the acquisition of the Sativida and First Class CBD brands. Low cost production, coupled with international, direct to customer sales channels will provide the foundation for the success of Mota.

About Sativida

Sativida is a producer and online retailer of CBD and branded CBD products in various jurisdictions in Europe, including Spain and the United Kingdom. Sativida currently develops and retails a vast range of organic CBD oils and cosmetics across Europe and is currently expanding its distribution network internationally. For more information on Sativida, readers are encouraged to review their website at www.sativida.es.

ON BEHALF OF THE BOARD OF DIRECTORS
MOTA VENTURES CORP.

Ryan Hoggan
Chief Executive Officer

For further information, readers are encouraged to contact the President of the Company, Joel Shacker, at +604.423.4733 or by email at IR@motaventuresco.com or www.motaventuresco.com

Neither the Canadian Securities Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this press release, which has been prepared by management.

Cautionary Note Regarding Forward-Looking Statement

All statements in this press release, other than statements of historical fact, are “forward-looking information” with respect to the Company within the meaning of applicable securities laws, including with respect to the expansion of Sativida’s business and entrance into the U.S. market, the expansion of First Class CBD’s business and entrance into the European market, its plans to become a vertically integrated global CBD brand, its plans to cultivate and extract cannabis to produce CBD and high-quality value added CBD products in Latin America for distribution domestically and internationally. The Company provides forward-looking statements for the purpose of conveying information about current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. By its nature, this information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. These risks and uncertainties include but are not limited those identified and reported in the Company’s public filings under the Company’s SEDAR profile at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise unless required by law.

Click here to see the educational profile for Mota Ventures (CSE:MOTA, FSE:1WZ:GR, OTC:PEMTF) and to request an investor presentation.

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Cannabis - Will The Fortune 500 Join The Party?

 
Our Exclusive FREE Report Contains Information You NEED To Know About Cannabis Stock Investing!
 

The evolution of the cannabis industry in recent years continues to outperform market projections. While many attribute this unprecedented growth and positive trending to a focus on business-to-consumer models, some cannabis companies are finding significant successes leveraging white labeling partnerships to tap into a rapidly emerging marketplace that thrives on innovative business models and unique products for a growing consumer base

As the popularity of white labeling services amongst cannabis companies grows, especially in the production of fast-growing categories of value-added products like extracts, oils, edibles, and vapes, companies that are becoming an expert in co-manufacturing and have the ability to provide these services are establishing themselves as the leaders in the industry. Used as a means to expand SKU lines as well as revenue, white labeling in the cannabis industry offers companies unparalleled upside and potential for impressive profitability.

How do white labeling services work?

White labeling is a business practice that involves one company manufacturing a product, which is later sold and advertised under another company’s brand. These solutions are typically done in exchange for a flat fee or percentage of product sales depending on the terms of the agreement.

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Ayurcann (CSE:AYUR) is a leading B2B post-harvest solution and provider focused on providing scalable custom processes and pharma-grade products to the medical cannabis industry in CanadaSend me an Investor Kit

This business-to-business solution offers a partnering company to attach their unique brand onto a “white label” product for marketing and sale to the final consumer and allows the manufacturing “white labeler” to potentially partner with different companies. Without the need to invest in infrastructure or technology. Cannabis companies can focus on building their brand and selling a wider range of products to a wide net of prospective customers.

Additionally, many also associate these white labeling solutions with toll processing, a practice in which one company provides the raw or partially processed product for another company to manufacture into a value-added product.

Access to extraction and packaging services through white label providers

White labeling services provide an ideal solution for companies who may not have the start-up capital to build a manufacturing facility, secure product licensing or have a difficult time getting a cannabis business off the ground. In these circumstances, partnering with a licensed processor that has established production and focused effort on creating a diversified range of high-quality cannabis products presents outstanding economic opportunities.

One leading example is  Ayurcann Holdings (CSE:AYUR), a B2B post-harvest solution provider focused on providing scalable custom processes and pharma-grade products to the recreational and medical cannabis industry in Canada. The company delivers a profitable business model of services and products. It operates three production divisions specializing in expert cannabis-based extraction and refinement, high-quality bulk oil sales and white label manufacturing.

White labeling options for cannabis companies

In an industry that is shifting its focus away from cultivation, more fully integrated companies delivering multiple verticals in cannabis processing and production offer an unparalleled investment opportunity that stands out from the rest. Major players in the cannabis white-labeling space offer unique exposure and retail footing that allow many companies to compete with established brands and quickly make an impact on consumers.

Ayuracann’s production offers full end-to-end outsourcing services, including proprietary product research & development, cannabis extraction & refinement and final production formulation and fulfillment. As a leading white labeling service provider, the company is focused on becoming the partner of choice for leading Canadian cannabis brands by delivering best-in-class, proprietary services, including ethanol extraction, formulation, product development and custom manufacturing.

Benefits of white labeling for cannabis companies

Data collected by Grand View Research projects the global legal cannabis market to be worth US$66.3 billion by 2025. While much of the cannabis product sold today is still the raw product, value-added consumer packaged goods are rapidly gaining significant traction throughout the cannabis industry.

White labeling services allow cannabis companies to capitalize on the latest and greatest cannabis consumer trends by expanding their portfolios to include high-demand products such as oil cartridges, extracts, topicals, CBD bath products and lotions, edibles and more. Without having to invest in the infrastructure, processing labs and manufacturing facilities required to make these products, companies can focus on releasing more products to an eager customer base. With an ever-evolving cannabis market, white label partnerships can give cannabis companies an edge over the competition.

While vertical integration can be a highly efficient strategy for large cannabis companies with the up-front capital to build the necessary infrastructure, companies without the resources to establish it take a huge risk by investing in operational and up-front costs. This includes time, building and equipment costs, license processing and finding specialized staff to grow and sustain the business.

Alternatively, outsourcing manufacturing allows a cannabis company to expand its product offerings, utilize quality formulations and establish its brand while reducing the financial risk associated with vertically integrating. Finding a compatible white labeling partnership means more time to build a brand and reach retailers and final consumers substantially faster. For cannabis companies who want to hit the ground running, white labeling offers the tools, expertise, and systems in place to make it happen.

Takeaway

Cannabis companies are using white labeling services to expand and diversify their product lines and tap into a market that is increasingly favoring value-added consumer packaged goods. For cannabis companies without fully vertically integrated operations, white-label partnerships with major players like Ayurcann Holdings offer exceptional economic efficiency and investing upside with minimized risks and infrastructural costs.

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Dolos Consultancy LTD is one of the leading corporate strategy, intelligence gathering, investors analysis and capital advisories in the market. Dolos is working with a network of investors, family offices and venture capitalists, and is retained to support and accompany Ayurcann in both Investor relations and market intelligence.

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