Cannabis Wheaton Income Corp. Announces Expansion to Uruguay and Securing of Significant CBD-Rich Hemp Production
Cannabis Wheaton Income Corp. (d/b/a Wheaton Income) (TSX-V:CBW) ("Wheaton Income" or "Wheaton" or the "Company") is pleased to announce that it has entered into a binding interim agreement (the “Agreement”) with Inverell S.A. (“Inverell”), pursuant to which Wheaton will purchase 80% of the issued and outstanding common shares on a fully diluted basis of Inverell.
Inverell is a federally licensed “Cannabis Operator” based in Montevideo, Uruguay and was founded by Dr. Raúl Urbina. Dr. Urbina completed his post-graduate studies in Molecular Biology at Princeton University and Agronics at the University of Almeria in Spain and possesses broad experience managing high-tech agricultural projects with a strong innovation component.
His experience also includes founding Stevia One where under his leadership as Chief Executive Officer, the company became the lowest cost producer of Stevia in the world, expanded its field under production up to 1000 hectares in 5 years and achieved the highest purity with the highest yields in the market. Pursuant to the Agreement, Dr. Urbina will remain as CEO of Inverell and leader of the Innovation Department of the Company.
Inverell’s “Cannabis Operator” license (the “License”) allows it to cultivate and harvest its proprietary hemp strain (RU) which contains approximately 0.5% THC and up to 8% CBD. Inverell also possesses a prime genetic bank and three additional hemp strains with variations of higher CBD and lower THC concentrations. Inverell currently has 16 hectares (approximately 1.72 million square feet) planted which is estimated to be harvested in April 2018. Inverell has another 574 hectares available for cultivation for a total of 600 hectares (approximately 60 million square feet).
The License also permits Inverell to plant up to 5 hectares of its proprietary genetics for the purposes of producing feminized seeds. In addition, Inverell has applied for a license to conduct research and development on various forms of cannabis and expects to receive the necessary governmental and regulatory approvals in short order.
Pursuant to the Agreement, the shareholders of Inverell are entitled to receive aggregate consideration of USD$15,000,000, to be paid as follows: 1. USD$2,000,000 in cash on closing of the transaction (the “Closing”); 2. USD$3,562,500 payable in common shares in the capital of Wheaton (the “Common Shares”) on Closing; and 3. USD$9,437,500 payable in Common Shares upon the achievement of certain milestones, including the successful registration of Inverell’s cannabis genetics and the successful exportation of CBD products.
Hugo Alves, President of Wheaton, stated: “We are incredibly excited to work with Dr. Urbina and his team in Uruguay. This transaction helps us secure a significant amount of CBD-rich hemp production that can be exported to other federally legal jurisdictions for further processing into nutritional and pharmaceutical products. We expect to see a significant increase in global CBD demand over the course of the coming years and believe that low-cost jurisdictions with favorable climates for outdoor cultivation will be key sources of CBD supply.
As we continue to execute our international strategy, we are thrilled to have identified Inverell as our first international production operation.”
Chuck Rifici, Chief Executive Officer of Wheaton, stated: “This transaction serves as our first entry into Latin America and provides our platform with a diversified source of low-cost CBD production for our international distribution channels. We believe that Dr. Urbina and Inverell’s experience in large scale commercial cultivation will be a significant competitive advantage for our domestic operations, especially when outdoor cultivation is permitted in Canada.”
