Thoughtful Brands Finalizes Deal to Acquire American CBD Extraction Corp.

Thoughtful Brands Inc. (CSE:TBI)(FSE:1WZ1)(OTCQB:PEMTF) (the "Company" or "Thoughtful Brands"), a global natural health products and eCommerce technology company, is pleased to announce it has entered into a definitive agreement to acquire (the "Transaction") American CBD Extraction Corp. ("American CBD") and its Kentucky-based wholly owned subsidiary East Kentucky Extractions, LLC ("EKE"), a hemp derived CBD extraction company. The Transaction sets the stage for Thoughtful Brands to become a vertically integrated CBD retailer, controlling each aspect of the supply chain including production, logistics and value chain

"The acquisition of American CBD will mark the start of a new era for Thoughtful Brands." said CEO, Ryan Dean Hoggan. "By having the ability to produce hemp extractions ourselves, we can ensure the quality of our brands and products more confidently than ever before, while also being in a prime position to reduce operating costs, expand sales and drive product innovation."

Upon the closing of the Transaction, the Company will gain access to an abundance of hemp biomass in Kentucky, and own a fully equipped and licensed 41,000 square foot facility that can process more than 1,200 pounds of hemp per day. This will enable several significant new focuses for Thoughtful Brands across multiple means of production, including:

  • CBD brands under the Thoughtful Brands umbrella will begin to utilize hemp-derived CBD extracted by the Company's newly acquired operations, which will reduce product costs.
  • The Company will launch new superior quality CBD brands, offering products made from hemp they extract and produce themselves.
  • Thoughtful Brands will develop new finished hemp-CBD products that are proprietary, as well as products formulated for future brand clients.
  • Thoughtful Brands will also become a wholesale supplier of hemp biomass.

Thoughtful Brands will also be able to utilize EKE's expertise to enhance the formulations of their various direct to consumer CBD brands, which include Nature's Exclusive, Sativida, Golden Path and Wild Mariposa.

Acquisition Details

On October 20, 2020, the Company, and a wholly-owned subsidiary of the Company ("Subco") entered into an amalgamation agreement with America CBD (the "Amalgamation Agreement"), pursuant to which the Company has agreed to acquire American CBD via a "three cornered" amalgamation, whereby Subco will amalgamate with American CBD to form one corporation ("Amalco") under section 269 of the Business Corporations Act (British Columbia). Pursuant to the Amalgamation Agreement, the Company will (i) issue 110,000,000 common shares of the Company (the "Consideration Shares") to the security holders of American CBD pro rata to the number of securities of American CBD held by each American CBD shareholder at the effective time of the completion of the Transaction, and (ii) Amalco shall become a wholly-owned subsidiary of the Company.

The Consideration Shares will be paid upfront and subject to a voluntary pooling arrangement, from which 25% of the Consideration Shares will be released on the closing date of the Transaction, followed by an additional 25% after each subsequent 90-day period.

In connection with the closing of the Transaction, the Company also expects to enter into an operating agreement (the "Operating Agreement") with 9112-7258 Quebec Inc. (the "Operator") for the operation of the American CBD assets in Jenkins, Kentucky. Pursuant to the Operating Agreement, the Company will pay the Operator a bonus of Cdn$1,300,000 upon the execution of the Operating Agreement, which shall be settled through the issuance of 13,000,000 common shares of the Company (the "Bonus Shares"). In addition to the Bonus Shares, the Operator will be entitled to receive a $2,000,000 payment ("Milestone Payment") from the Company upon (i) the achievement of cumulative sales of over USD$1,000,000 produced from the Kentucky facility acquired as part of the Transaction; or (ii) the entering into of a supply agreement with a third-party to deliver finished product on a wholesale basis at a price less than the manufacturing cost of similar product by the Company. The Milestone Payment will be settled through the issuance of common shares of the Company ("Milestone Shares"), which shall be valued based on the five-day volume weighted average closing price of the Company's shares on the Canadian Securities Exchange immediately prior to the milestone payments becoming payable.

Closing of the Transaction is subject to, among other things: (a) American CBD having a minimum of Cdn$2,250,000 in immediately available cash in hand less costs related to the Transaction (which are not exceed Cdn$40,000); (b) the debts and liabilities of American CBD not exceeding Cnd$250,000 on a consolidated basis, other than the costs related to the Transaction (which shall not exceed Cdn$40,000) and any audit related costs; (c) all outstanding securities of American CBD convertible into shares of American CBD having been cancelled; (d) the time period for the exercise of any dissent rights of American CBD shareholders having expired, and shareholders of American CBD not having exercised such dissent rights; (e) Cdn$300,000 having been sent to a bank account of American CBD or a subsidiary thereof; (f) and the delivery of certain documents by each party. Readers are cautioned that completion of the Transaction remains subject to the closing conditions noted above. The Transaction cannot be completed until these conditions are satisfied.

The Company also expects to pay an administrative fee of 1,100,000 common shares to a consultant who assisted with the Transaction.

The Company is at arms-length from American CBD and its shareholders. The Transaction will not constitute a fundamental change for the Company, nor is it expected to result in a change of control of the Company, within the meaning of applicable securities laws and the policies of the Canadian Securities Exchange.

In addition to the above the Company announces that it has issued 1,327,200 common shares as repayment to settle a US$100,000 debt to Justus Consulting Inc. (the "Creditor") at a deemed price of CAD$0.10 per share. The Creditor has agreed to accept common shares using the Bank of Canada closing rate on October 6, 2020 of CAD$1.3272. All common shares of the Company issued to the Creditor will be subject to a four-month-and-one-day statutory hold period in accordance with the policies of the Canadian Securities Exchange.

About American CBD Extraction Corp.

Because of its location, American CBD's subsidiary has an abundant availability of biomass at economic prices, which is then processed using CO2 extraction to produce high-grade hemp derived CBD oil for the American market. American CBD has a fully built and licensed 41,000 sq ft facility with the ability to process over 1,200 lbs per day to produce winterized crude with the current extraction systems.

About Thoughtful Brands Inc.

Thoughtful Brands Inc. is an eCommerce technology company that researches, develops, markets, and distributes natural health products through various brands in North America and Europe. Through continuous strategic acquisitions, the Company has a strong footprint in the CBD market, as well as the burgeoning psychedelic medicine sector. Thoughtful Brands owns and operates a 110,000 square foot pharmaceutical manufacturing facility in Radebeul, Germany, where its highly skilled team conducts clinical studies utilizing naturally occurring psilocybin and other compounds found in psychedelics for the treatment of opiate addiction, while planning for future opportunities to create proprietary psilocybin products.

ON BEHALF OF THE BOARD OF DIRECTORS

Thoughtful Brands Inc.
Ryan Hoggan
Chief Executive Officer

For further information, readers are encouraged to contact Joel Shacker, President at +1.604.423.4733 or by email at info@thoughtful-brands.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 closing of the Transaction, the business plans and prospects of American CBD after the completion of the Transaction, the ability to create proprietary psilocybin products in the future. 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.

SOURCE:Thoughtful Brands Inc.



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Cannabis leaf on road marked with "2025," with sunlight in the background.

New Cannabis Consumption Trends, Regulatory Shifts Seen Driving Market in 2025

Understanding trends in the cannabis industry is paramount for investors eyeing a market with steady growth potential, but the landscape is complex as products and regulations continue to evolve.

Consumption habits are changing as edibles, vaping and THC beverages gain traction, especially among younger users, and cannabis companies are adapting their offerings to meet shifting demand.

Meanwhile, regulatory uncertainty, particularly surrounding the future of the US Farm Bill and state-level restrictions on hemp-derived cannabinoids, continues to challenge the market.

Despite these headwinds, production data and long-term growth forecasts suggest the cannabis industry remains on a promising — albeit turbulent — path. Read on for more on key trends to watch in 2025.

Consumption methods evolving post-legalization

Shifts in consumer behavior are reshaping markets across the board, and the cannabis industry is no exception.

While smoking remains the dominant method of cannabis consumption, a recent report from the Centers for Disease Control and Prevention highlights the growing popularity of edibles, vaping and dabbing.

The report notes that vaping and dabbing are particularly pronounced among younger adults.

A separate study published by the American Medical Association and funded in part by the Canadian Institutes of Health Research also points to how product preferences have changed among Canadian users since legalization in 2018.


The study indicates that while the use of flower, cannabis concentrates, oil, tinctures and topicals has decreased during that time, the use of vape cartridges, edibles and beverages has increased.

Edibles and beverages were legalized in Canada in late 2019, and Truss Beverage was one of the first players to introduce cannabis-infused drinks. Truss was a joint venture formed by Molson Coors Canada (TSX:TPX.A,TSX:TPX.B) and HEXO, a cannabis company that has since been acquired by Tilray Brands (TSX:TLRY,NASDAQ:TLRY).

In early 2020, Tilray launched a lineup of confectionery, wellness products and beverages through its subsidiary, High Park; Canopy Growth (TSX:WEED,NASDAQ:CGC) made a similar move. These companies gradually brought their products to the US as more states legalized cannabis for medical and/or recreational use.

Today, established cannabis brands typically offer edibles and beverages alongside their other products. Organigram Global (TSX:OGI,NASDAQ:OGI) is one of the newest US entrants, with its April acquisition of Collective Project providing immediate access to the US hemp-derived THC beverage market.

Growing awareness of health and wellness, potentially amplified by the pandemic-led adoption of health trackers, appears to be making an impact on the alcoholic beverage market.

A 2023 Gallup poll reveals a two decade decline in alcohol consumption, particularly among younger adults, suggesting a shift towards more health-conscious lifestyles within this demographic.

Craft beer production declined by 4 percent year-on-year in 2024, according to data collected by the Brewers Association. This marked the largest drop in the industry's history, excluding the pandemic. For small, independent craft breweries, 2024 marked the third consecutive year of declining production. A drop in the number of operating small breweries last year provides further evidence of this trend, with 501 closures in 2024 versus 434 openings.

Challenges in the alcohol market extend beyond the brewing industry, with the New York Times recently reporting the closure of a handful of nightclubs facing decreased alcohol sales alongside rising insurance and rent costs.

Meanwhile, cannabis lounges have been popping up across the US for the last several years. As of early 2025, several states had legalized or were in the process of implementing regulations for cannabis consumption lounges.

Hemp market growth despite regulatory uncertainty

The burgeoning hemp industry is another segment of the expanding cannabis market.

The legalization of industrial hemp — defined as cannabis with a THC concentration of 0.3 percent or less — through the 2018 Farm Bill led to initial investment and optimistic projections for CBD wellness products and various industrial applications. The sector’s rapid evolution also brought the rise of hemp-derived intoxicating cannabinoids, creating a market that presented both opportunities and complexities for participants.

However, after an initial boom, a lack of infrastructure and clearly defined regulations for CBD, as well as state-level variations and market oversupply, ultimately contributed to a quick retraction.

2024 was a pivotal year for the US hemp industry, as the hemp-related provisions of the 2018 Farm Bill — originally set to expire in September 2023, but extended to December 31, 2024 — created an urgent need to address critical issues like THC limits and the regulation of novel hemp-derived cannabinoids. A major point of contention was the proposed shift from defining hemp based on Delta-9 THC concentration (0.3 percent or less) to “total THC,” which includes THCA.

This change had the potential to significantly impact farmers and processors, as many hemp varieties that are compliant under the Delta-9 THC rule could exceed the 0.3 percent limit when THCA is included.

Various bills and amendments were proposed in 2024 as part of the Farm Bill discussions, each with different approaches to regulating hemp. Separate regulatory frameworks for industrial hemp and hemp grown for cannabinoids were suggested, and many states took their own action, leading to a patchwork of regulations and even outright bans.

Despite challenges, data from the US Department of Agriculture suggests signs of recovery.

The department's annual National Hemp Report from 2024 points to an 18 percent increase in industrial hemp production value between 2022 and 2023, with output growth seen in specific sectors like floral (18 percent), fiber (133 percent) and seed hemp (414 percent). The 2025 report from the Department of Agriculture indicates further expansion, with notable increases observed in both acreage (up 64 percent from 2023) and value (46 percent).

The 2024 Farm Bill ultimately did not pass, and right now the hemp industry is operating under a temporary extension of the 2018 Farm Bill under the American Relief Act of 2025, signed into law on December 21, 2024.

The 2018 Farm Bill is now set to expire on September 30, 2025.

While analysts for Markets and Markets project that the North American hemp industry will grow at a CAGR of 22.4 percent and ultimately reach a valuation of US$30.24 billion by 2029, the future of the industry will be heavily influenced by the outcome of the ongoing Farm Bill discussions.

US cannabis legalization remains stalled

Although there is clear demand for cannabis products, the now-defunct rescheduling process in the US is likely to continue casting a shadow of uncertainty over the industry's long-term trajectory.

Legal and procedural delays, including allegations of improper conduct and bias within the US Drug Enforcement Administration (DEA), led to hearing cancellations, and the new administration of US President Donald Trump has brought leadership changes to key agencies like the DEA and the Department of Justice.

Terry Cole, who Trump nominated to be DEA administrator on February 11, has a history of opposing cannabis legalization in the country. Similarly, Pam Bondi, Trump’s pick to lead the justice department, staunchly opposed a movement to legalize medical cannabis during her tenure as Florida’s attorney general.

While there have been bipartisan efforts in Congress to end federal cannabis prohibition and establish regulations for eventual legalization, the DEA’s actions and statements indicate a potential stall or reversal of progress.

In addition to that, new research is adding complexity to the debate.

A study published in the American Journal of Psychiatry this past March highlights an association between the use of high-potency cannabis strains and increased risks of psychosis, a factor that may not have been fully considered by the Department of Health and Human Services. As stronger cannabis strains become more widely available, a reassessment of their potential health risks may be required.

Investor takeaway

While the cannabis industry holds promise for growth and innovation, investors must remain acutely aware of the regulatory uncertainties and market volatility that will undoubtedly shape its trajectory in the years to come.

Don’t forget to follow us @INN_Cannabis for real-time news updates!

Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.

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