TORONTO--(BUSINESS WIRE)--Halo Labs Inc. (“Halo” or the “Company”) (NEO: HALO, OTCQX: AGEEF, Germany: A9KN) today announces that further to the press releases dated December 24, 2019 and March 3, 2020, the Company has agreed to a second extension of the binding letter of intent (the “LOI”) to acquire all of the common shares of Canmart Limited (“Canmart”), a licensed importer and distributor of cannabis based products for medicinal use (“CBPM’s”). Due to the ongoing global COVID-19 pandemic, the Company has agreed to the extension to allow both parties adequate time to complete due diligence and negotiate the definitive agreements while under shelter-in-place restrictions.
The total transaction size of the Canmart acquisition is anticipated to be C$6 million, payable in Halo common shares and at a deemed price of C$0.35 per share, which is based on the 30-day VWAP as of December 23, 2019, the day the LOI was originally executed (“the Consideration”). The total Consideration will be paid periodically as Canmart achieves critical business milestones. The LOI has been extended for an additional 60 days to June 21, 2020.
Halo to acquire 100% of Canmart Limited, a fully licensed operator
- Canmart is one of the UK’s few late stage applicants for a Controlled Drugs License to import and distribute licensed Cannabis-Based Products for Medicinal use (“CBPMs”)
- This intended acquisition of Canmart will position Halo as a seed to sale importer and distributor of medical cannabis in the United Kingdom
- Canmart operates a licensed 25,000 square foot third party logistics warehouse in the southeast of England
Although Medical cannabis has been legal in the UK since November 2018, sizeable growth is anticipated, particularly for imported products
- The UK imports 100% of its CBPMs for domestic use
- Estimated 1.4 million British citizens currently directly purchase CBPMs to treat chronic health conditions from unregulated channels
- Substantial growth potential for CBPMs through the National Health Service (“NHS”), as improved medical guidelines are adopted, and the market becomes better regulated
Canmart already holds wholesale distribution and special licenses, issued by the MHRA
- It also has applied for a Controlled Drugs License from the Home Office, to import and distribute licensed CBPMs
- The Home Office is the government department responsible for the enforcement of cannabis legislation in the UK and has recently completed an initial site visit to Canmart’s warehouse facility to assess its suitability and security arrangements
- Halo still anticipates commencing export of CBPMs to the UK in 2020 from Bophelo, subject to approval from the Medicines and Healthcare products Regulatory Agency (“MHRA”) and any other necessary regulatory approvals.
Halo believes the UK cannabis market will be an attractive investment. The legal cannabis industry in the UK is in its earliest stages. According to Prohibition Partners, a leading market research group for the international cannabis market, there are approximately 7.3 million people in the UK who buy CBD products each year from online retailers and high-street stores. Further the country has 4.7 million recreational cannabis users and 1.4 million people who use CBPMs to treat chronic health conditions. Those using CBPMs in this way are currently purchasing them through unregulated channels1.
Tim Henley expert at the UK based Extract industry advocacy group reports additional positive developments for the UK cannabis industry.
- The number of Cannabis Clinics has increased by 50% in 2020 with over separate 10 locations across the country.
- The number of Cannabis prescriptions are rising; there were 100 in all of 2019 and have seen numbers of over 200 a month in 2020 and is increasing.
- Cannabis Clinics now have a waiting list with the biggest chain having 1000 patients waiting.
- Once a patient has been seen there is a 96% prescription rate.
- The CQC has authorised the use of Telemedicine in consultations and is being used now due to impacts of the pandemic.
Kiran Sidhu, CEO and Co-Founder of Halo Labs, comments, “While we are devastated at the toll that COVID-19 is taking on the world, we have continued to work hard at Halo on executing business objectives. Moving forward with the extension of the LOI will continue to provide Canmart and Halo sufficient time during this global crisis to properly finalize the transaction. Expanding Halo’s operations into the UK and increasing presence in new countries remains at the forefront of Halo’s growth strategy.”
About Canmart Limited (UK)
Established in December 2018, Canmart was one of the first companies set up in response to the legalization of medical cannabis in the UK. Located in the southeast of England, Canmart operates in a 25,000 square foot third party logistics warehouse. Canmart anticipates being able to commence the import and distribution of licensed CBPMs to specialist doctors and their patients in the UK during the second quarter of 2020.
About Halo Labs
Halo is a leading cannabis cultivation, manufacturing, and distribution company that grows, extracts, and processes quality cannabis flower, oils, and concentrates. Halo sold over 5 million grams of oils and concentrates since inception and has continued to evolve its business through delivering value with its products. Via verticalization, Halo has expanded in key markets in the United States and Africa with planned expansion into European and Canadian markets. With a consumer-centric focus, Halo markets innovative, branded, and private label products across multiple product categories.
Recently, Halo entered into binding agreements to acquire one dispensary in Los Angeles, three KushBar branded dispensaries, five development permits in Alberta Canada, and Canmart Limited which holds wholesale distribution and special licenses allowing the import and distribution of cannabis based products for medicinal use (CBPM’s) in the United Kingdom. Halo is led by a strong, diverse management team with deep industry knowledge and blue-chip experience. The Company is currently operating in the United States in California, Oregon, and Nevada, while having an international presence in Lesotho within a planned 200+ hectare cultivation zone via Bophelo as well as planned importation and distribution in the United Kingdom via Canmart.
For further information regarding Halo, see Halo’s disclosure documents on SEDAR at www.sedar.com.
Cautionary Note Regarding Forward-Looking Information and Statements
This press release contains certain "forward-looking information" within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only Halo’s beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of Halo’s control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or may contain statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "will continue", "will occur" or "will be achieved". The forward-looking information and forward-looking statements contained herein include, but are not limited to, statements regarding the acquisition of Canmart Limited in the UK and distribution from Lesotho, Africa.
By identifying such information and statements in this manner, Halo is alerting the reader that such information and statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results to be materially different from those expressed or implied by such information and statements. In addition, in connection with the forward-looking information and forward-looking statements contained in this press release, Halo has made certain assumptions. Although Halo believes that the assumptions and factors used in the preparation of, and the expectations contained in, the forward-looking information and statements are reasonable, do not place undue reliance on such information and statements. No assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements. The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and Halo does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws. All subsequent written and oral forward-looking information and statements attributable to Halo or persons acting on its behalf is expressly qualified in its entirety by this notice.
Prohibition Partners Report, December 2019. https://prohibitionpartners.com/reports/#the-uk-cannabis-report