WeedMD and CannTx Life Sciences Create a Cannabis Cultivation and Consumer Product Portfolio

TORONTO– WeedMD Inc. (TSX-V:WMD) (OTCQX:WDDMF) (FSE:4WE), a federally licensed producer and distributor of medical-grade cannabis is pleased to announce it has signed a Letter of Intent to acquire all of the issued and outstanding shares of renowned craft cultivator CannTx Life Sciences Inc. in an all-stock transaction. CannTx, which operates out of its licensed production facility in Guelph, Ontario, is a highly regarded cultivator that specializes in tissue culture and micropropagation techniques, agricultural research, craft cultivation, and processing of new cannabis products such as rosin and hash. Closing of the Transaction is subject to the parties finalizing a definitive agreement and the satisfaction of other conditions that are customary for transactions of this nature, and is expected to close in mid-year 2021.

Under the terms of the LOI, WeedMD will acquire and integrate CannTx’s business operations including CannTx’s B2B and adult-use businesses, currently doing business as Steadystem Solutions and Royal City Cannabis Co. Upon completion, the combined entity will house one of the most comprehensive genetic banks in the industry, further strengthening WeedMD’s already robust cultivation and high-margin processing activities for new strain and product expansion.

“The ethos of WeedMD will always be rooted in quality cultivation. With the acquisition of CannTx, we will now be able to participate across all market segments with a strong portfolio of refined cannabis brands and products that consumers are moving towards,” said George Scorsis, Interim CEO and Executive Chair of WeedMD. “The CannTx team is nationally regarded as one of the premier leaders in genetics validation and more recently for its craft cultivation and solventless, full-spectrum products under the Royal City Cannabis Co. brand – highlighted as some of the best craft products in the country. We are aligned in our philosophy that cannabis cultivation is a perfect mix of science and art. While working together in the genetic preservation and regeneration of our prized strains. we recognized that merging our talent and companies will solidify our respective businesses and together, move us closer to profitability.”

“Since 2013, we’ve been saying that the key to success in the cannabis marketplace will be product differentiation through innovation and high standards of quality and consistency. We appreciate that our vision is warmly welcomed by the brand-focused leadership at WeedMD,” said Mike Abbott, President, CEO and Co-Founder of CannTx. “We also appreciate the hard work that the management team has undertaken to transform WeedMD into a vehicle for growth and realization of shareholder value while respecting stakeholder interests. We are excited to leverage this corporate infrastructure to help us introduce our great products to more Canadians seeking cannabis produced with passion.”

“Our team of exceptional talents have clear actionable insights on how to solve present challenges in our industry to achieve excellent results,” said Buck Young, Executive Director and Co-Founder of CannTx. “We have accomplished so much as an employee-owned and founder-led company. Coming together will allow us to realize the commercial value of all our industry learnings alongside the talent, assets, and capabilities WeedMD possesses.”

By preserving their genetic assets and ensuring their integrity, WeedMD will be able to consistently and perpetually grow the same great products on which they’ve built an award-winning reputation. In addition to expanding WeedMD’s genetics bank and cultivars’ lifecycle with its rejuvenation techniques, CannTx’s platform also efficiently creates genetic assets storage.

Benefits to WeedMD and CannTx:

• Complementary Operations and Premium Craft Brand: WeedMD’s low-cost southwestern Ontario production platform and robust sales channels are expected to generate improved margins with the addition of craft brand Royal City Cannabis Co. which was recently added to a select group of “Craft Cultivators” by the Ontario Cannabis Store. CannTx’s indoor craft cultivation operations in Guelph, Ontario will be maintained as the Company’s craft and specialty production site (for rosin and hash processing). WeedMD’s low-cost, state-of-the-art greenhouse and outdoor cultivation operations housed in Strathroy continues to be the primary cultivation hub. Its Aylmer extraction facility is maintained as its primary biomass processing facility where its oils, capsules, balms and vape products are currently produced and also serves as it medical cannabis and retail packaging centre.
• Further Strengthens Distribution Capabilities: In addition to expanding its cultivation footprint into the craft market, WeedMD will leverage CannTx’s international relationships to market new and innovative consumption methods to emerging cannabis markets in the Americas and Europe. Additionally, CannTx’s affiliation with the University of Guelph and other learning institutions will broaden WeedMD’s network. The Company has the necessary infrastructure to meet emerging industry demand, including expanding medical cannabis portfolio and the rapidly growing retail environment in 2021.
• Broadens Technical Expertise and Proprietary Assets: With its limited overlap in talent, CannTx’s management team will bring extensive propagation, agricultural, and science-based experience, as well as strong industry and client relationships. Its proprietary Steadystem Solutions program, which collects tissues from donor plants and regenerates them using an in-vitro platform to re-produce and maintain historical cannabinoid and terpene profiles, while removing bacterial, fungal, entomological, and viral pathogens, is a welcome asset. These strengths will be complementary to WeedMD’s cultivation and product-focused skillsets.

(This information is primarily sourced from Weedmd.  Highly Capitalized has neither approved nor disapproved the contents of this news release. Read our Disclaimer here).