Nutritional High International Inc. (“Nutritional High” or the “Company”) (CSE:EAT, OTCQB:SPLIF, FRANKFURT:2NU) has signed a non-binding letter of Intent (“LOI”) with Good Vybes, LLC (“GV”) and Hannah Ashby (“Ashby”) to provide a Southern California base of operations for the Calyx Brands’ (“Calyx”), the wholly owned cannabis products distributor of the Company.
Nutritional High International Inc. (“Nutritional High” or the “Company”) (CSE:EAT, OTCQB:SPLIF, FRANKFURT:2NU) has signed a non-binding letter of Intent (“LOI”) with Good Vybes, LLC (“GV”) and Hannah Ashby (“Ashby”) to provide a Southern California base of operations for the Calyx Brands’ (“Calyx”), the wholly owned cannabis products distributor of the Company. The deal provides the Company with an additional distribution center in Southern California, effectively doubling statewide distribution capacity. This additional footprint enables the Company to expand the scope of its services to communities such as Los Angeles, Long Beach, Palm Springs/Palm Desert, the Inland Empire and San Diego County, which represent the largest number of licensed dispensaries in California and where the majority of newly licensed retailers are expected to be opening over the next 24 months (according to temporary licensing data from the Bureau of Cannabis Control (“BCC”)).
“This new distribution hub allows us to improve our quality and speed of service to hundreds of dispensaries across Southern California,” commented Dakota Sullivan, CEO of Calyx Brands, the Company’s wholly owned licensed distribution subsidiary. “Nutritional High continues to make strong progress in California, and with this agreement we are able to better fulfill the needs of the fastest growing cannabis markets in the State. Since Nutritional High acquired Calyx in March 2018, we have increased our revenues more than sevenfold and expanded our service footprint to more than 500 dispensaries. We look forward to continuing our momentum through 2019 and beyond.”
Ashby holds a temporary distribution license issued by the BCC to operate a cannabis distribution business at a property located in Chatsworth, CA (“Chatsworth Licensed Premises”), leased by GV. Ashby is in the process of updating the licenses for GV’s name, which remains subject to regulatory approval.
Nutritional High has funded the completion of the build-out of the Chatsworth Licensed Premises, and the LOI provides for the parties to enter into sublease agreements, services agreements and other ancillary agreements (the “Definitive Agreements”) whereby Calyx and Ashby will service Calyx’s Southern California clients on an exclusive basis. Services offered to clients will include management of laboratory testing, sales and marketing support, packaging, warehousing, tax collection, transportation and fulfillment. Nutritional High will provide GV with an operating line of credit in an amount to be approved by the Company from time-to-time, and certain other financial support of loans and milestone-based payments on meeting licensing milestones of up to US$330,000. The build-out of the Chatsworth Licensed Premises is complete and operations as contemplated under the LOI will commence upon receipt of local authorization, expected this month.
Subject to receiving requisite regulatory approvals, Nutritional High has the right to acquire a 51% equity interest in GV for US$200,000 (made up of the conversion of US$100,000 of its loan to GV, and payment of US$100,000 to Ashby. Ashby will receive a preferred return of US$120,000 per year before any dividends are paid. At the end of five years, Nutritional High shall have an option to acquire Ashby’s remaining 49% interest for $1.00. Ashby will have the right to have GV distribute her products as a mail order cannabis subscription box service as well as other non-competitive products to Calyx or Nutritional High.
About Nutritional High International Inc.
Nutritional High is focused on developing, manufacturing and distributing products under recognized brands in the cannabis products industry, with a specific focus on edibles and oil extracts for medical and adult recreational use. The Company works exclusively with licensed facilities in jurisdictions where such activity is permitted and regulated by state law.
The Company follows a vertically integrated model with a fully developed strategy for acquisitions in extraction, production, sales, and distribution sectors of the cannabis industry. Nutritional High has brought its flagship FLÏ™ edibles and extracts product line from production to market through its wholly owned subsidiaries in California and Oregon, as well as Colorado where its FLÏ™ products are manufactured by a third-party licensed producer. In California, the Company distributes its products and products manufactured by other leading producers through its wholly owned distributor Calyx Brands Inc. and is entering the Nevada, Washington State and Canadian markets in the near future.
For updates on the Company’s activities and highlights of the Company’s press releases and other media coverage, please follow Nutritional High on Facebook, Twitter and Instagram or visit www.nutritionalhigh.com.
For further information, please contact:
Co-Chairman of the Board
Nutritional High International Inc.
Director, Investor Relations
Nutritional High International Inc.
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This news release may contain forward-looking statements and information based on current expectations. These statements should not be read as guarantees of future performance or results. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those implied by such statements. Risks that may have an impact on the ability for these events to be achieved include completion of due diligence, negotiation of definitive agreements and receipt of applicable approvals. Although such statements are based on management’s reasonable assumptions, there can be no assurance that such assumptions will prove to be correct. We assume no responsibility to update or revise them to reflect new events or circumstances.
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Additionally, there are known and unknown risk factors which could cause the Company’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information contained herein. All forward-looking information herein is qualified in its entirety by this cautionary statement, and the Company disclaims any obligation to revise or update any such forward-looking information or to publicly announce the result of any revisions to any of the forward-looking information contained herein to reflect future results, events or developments, except as required by law. Some of the risks and other factors that could cause actual results to differ materially from those expressed in forward-looking information expressed in this press release include, but are not limited to: obtaining and maintaining regulatory approvals including acquiring and renewing U.S. state, local or other licenses, the uncertainty of existing protection from U.S. federal or other prosecution, regulatory or political change such as changes in applicable laws and regulations, including U.S. state-law legalization, market and general economic conditions of the cannabis sector or otherwise.