Mettrum Health Corp. (TSXV:MT.V), a vertically integrated provider of cannabis products, is pleased to announce that it has entered into an agreement with Cannabis Care Canada Inc. (“CCC”) to sell to CCC its wholly-owned subsidiary Mettrum (Bennett North) Ltd. (“Bennett Road North”), which is licensed to produce and sell dried cannabis and cannabis extracts for medical purposes. CCC is financially backed by Laborers International Union of North America (“LiUNA”), North America’s single largest construction union with over 100,000 Canadian members. Under the terms of the agreement, CCC will pay $7 million in cash to acquire Bennett Road North and enter into a three-year Supply Agreement that is expected to generate up to $40mm in revenue for Mettrum over the next three years. As part of the transaction, CCC will assume all outstanding obligations associated with Bennett Road North.
Once the transaction is completed in the coming months, Bennett Road North will be renamed Starseed Medicinal Inc. (“Starseed”) and will become a wholly-owned subsidiary of CCC, whose board members include Mr. G. Edmund King (former CEO and Chairman of Wood Gundy), Dr. Hugh E. Scully (previously president of both the Ontario and Canadian Medical Associations), and retired Major General Lewis Mackenzie. Mettrum will supply Starseed with cannabis and cannabis extracts to sell to members of LiUNA who have valid medical documents to use cannabis for medical purposes.
- Supply Agreement Expected to Generate up to $40mm in Revenue and Make a Material Contribution to Profitability
- Sale Agreement of Non-Core Asset adds Non-Dilutive $7mm to Balance Sheet
- Accelerates Previously Announced Consolidation, Improving Operating Performance
“Given the scale of our operations at Bennett Road South and Creemore, it was very timely to find a purchaser for Bennett Road North who is also a great strategic partner,” said Michael Haines, Chief Executive Officer of Mettrum. “We are extremely excited to enter into this agreement which does three important things for Mettrum. First, it allows us to continue to lower operating costs by streamlining and consolidating our operations at our new headquarters. Second, it strengthens our already robust balance sheet in a non-dilutive manner. Lastly, and most importantly, it greatly enhances the scale of our business through our supply agreement, and access to a new market, with Cannabis Care Canada Inc.”
Laborers International Union of North America (“LiUNA”), North America’s single largest construction union with over 100,000 Canadian members, is a shareholder of Cannabis Care Canada Inc. and will be working closely with Starseed on behalf of its members. Mr. Joseph Mancinelli, VP of LiUNA said, “We believe cannabis is a medicine able to treat many ailments, including the management of pain. Working in conjunction with Mettrum and Starseed, we want to make medicinal cannabis treatment available to all of our members and their families and will, in time, make it a paid benefit.”
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