Khiron Life Sciences Corp., a medical cannabis company with its core operations in Latin America, announced today that the Company has entered into a non-binding letter of agreement to acquire 100% of the outstanding securities of Canapalife S.r.l. and 100% of the economic interest in Campodoro S.r.l. (“Canapalife Group“) from Alvaro Garro and Paolo Puggioni (the “Vendors“), being the sole shareholders of Canapalife Group.
Canapalife is a prominent hemp product company based in Italy with licenses for the cultivation, research, production and marketing of hemp-based products. Canapalife operates a cultivation site in Padua, near Venice, Italy, conducts research in partnership with prominent universities and has registered three CBD consumer brands, including, Bloom CBD e-liquids, Canvax nutraceutical products and Legal Seeds, a brand designed to market EU approved seeds to the consumer market. These products are in-market through established partnerships with pharmacies and independent retail chains across Italy.
Italy represents the fourth largest economy in Europe, and is the second largest cannabis market in Europe, with a projected medical cannabis market value of € 7.5 Billion in 2028 (Source: Prohibition Partners – The European Cannabis Report, January 2019).
Alvaro Torres, Khiron CEO and Director commented, ” The proposed transaction offers Khiron an entry to the European market and expansion of our global footprint. In addition to increasing our multi-jurisdiction cultivation and production capacity, Canapalife offers the addition of dynamic brands to our product portfolio, access to key retailer partners and relationships with Italy’s leading research facilities.”
Upon completion of the acquisition of Canapalife Group, it is anticipated that each of Mr. Garro and Mr. Puggioni, the sole shareholders of Canapalife Group, will continue on as key employees with Khiron. Closing of the transaction is anticipated to be the end of Q2.
As consideration for the acquisition of Canapalife Group, Khiron will issue such number of common shares as is equal to C$10,500,000 (the “Purchase Price“) at a deemed price per share equal to the trailing 20 day volume weighted average closing price of its common shares on the TSX Venture Exchange (“TSXV“). An earn out of additional common shares for up to C$4,500,000, will be payable by Khiron to the Vendors over the course of two years subject to Canapalife Group attaining certain revenue milestones.
Hillcrest Merchant Partners Inc. acted as advisor on this agreement. Completion of the transaction, and issuance of any finder’s fee, is subject to the execution of a definitive agreement and receipt of all required regulatory approvals, including final acceptance of the TSXV.