EXMceuticals said that the deal will create a new company in the “fast-growing” business segment of hemp and cannabinoid-based product distribution
EXMceuticals Inc (CSE:EXM) and US cannabis distributor Global Cannabinoids have signed a definitive agreement related to their all-share merger deal.
In a statement, the Canadian cannabis firm said that the deal will create a new company in the “fast-growing” business segment of hemp and cannabinoid-based product distribution.
In parallel with the merger, the two companies are raising C$6 million via a financing to power the transaction.
Following the deal’s close, the companies will operate under the Global Cannabinoids (GC) name, EXMceuticals said in a release.
Global Cannabinoids is a US-based online platform for the production, manufacture and distribution of premium wholesale hemp oil, extract, isolates and finished products. The two companies will look to expand globally with EXMceuticals’ existing Portugal hub to import, research, refine and export cannabinoids and cannabis-based products into and throughout the European Union.
EXMceuticals CEO Jonathan Summers called the transaction “transformational” for the Vancouver-based cannabis firm.
“The enlarged Global Cannabinoids will benefit from an accelerated expansion into European distribution, as well as a business footprint encompassing both hemp and cannabis,” Summers said.
Global Cannabinoids CEO Kelly Ann Lewis-Bortman said that the deal will accelerate expansion plans for the newly combined entity.
"The US market offers us enormous room to grow further from here, and we can now also push quickly into other rapidly growing markets for additional sales, in particular Europe,” Lewis-Bortman said. “We are committed to making the combined company a significant part of the emerging multi-billion dollar CBD and cannabis market opportunity.”
Deal terms
Under the terms of the share deal, effective May 4, the units issued to the members of Global Cannabinoids in exchange for the contribution of Global Cannabinoids' assets will be exchangeable at the option of holders for an aggregate of 168 million shares of EXMceuticals.
Prior to any exercise, EXMceuticals will issue to the members of Global Cannabinoids, 168,000 proportionate voting shares of EXMceuticals where each share will carry 100 votes at any meeting of the shareholders of EXMceuticals, no economic interest in EXMceuticals and can be cancelled on a proportionate basis upon any exchange of the Global-EXM exchangeable units for EXMceuticals shares.
The deal will result in EXMceuticals holding approximately 33% of Global-EXM and the members of Global Cannabinoids holding approximately 66% of Global-EXM.
Global Cannabinoids CEO Lewis-Bortman will head up the newly-formed company as CEO while EXMceuticals' Summers will act as chairman. A combined five-member board of directors will consist of three Global Cannabinoids directors and two appointed by EXMceuticals – one of which is Summers.
The transaction is expected to close by the end of the year.
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