Canada House Provides Corporate Update Ahead of MTL Cannabis Transaction
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LOUISEVILLE, QC, Nov. 26, 2021 /CNW/ – Canada House Wellness Group (CSE: CHV) (“Canada House” or the “Company“), a fully integrated medical cannabis company, is pleased to announce the achievement of several company milestones as it works towards the completion of the previously announced reverse takeover (RTO) of the Company by Montréal Cannabis Médical Inc. (“MTL Cannabis“) (the “Transaction“). The Transaction is now expected to close in calendar Q1 2022, subject to the satisfaction of customary closing conditions, including the receipt of applicable regulatory approvals and the shareholder approval described below.
Significant progress has been made regarding the Transaction, whereby MTL Cannabis will acquire Canada House’s extended sales and processing licensing capabilities, provincial supply deals, profitable online medical business with a direct-to-patient model focused on military veterans, and clinic network with fourteen (14) locations nationwide. The finalization of the circular and satisfaction of condition precedents, including confirmatory due diligence, and company audits are nearing completion, alongside internal integration work of Canada House and MTL Cannabis as we approach the closing of the Transaction.
The Transaction requires the approval of at least 66 2/3% of the votes cast by the shareholders of Canada House present at a special meeting of Canada House shareholders to be called to approve the Transaction (the “Special Meeting“). The Special Meeting is currently anticipated to be held in February 2022. Canada House is pleased to announce that, at this time, it has entered into voting and support agreements in favor of the Transaction with shareholders of Canada House representing more than 61% of Canada House’s total issued and outstanding shares.
For further details on the Transaction, see the Company’s press release dated August 9, 2021 available on SEDAR at www.sedar.com.
Integration and Commercialization Update
Canada House’s wholly owned subsidiaries, IsoCanMed Inc. (“ICM“), a Québec-based Health Canada licence holder, and Abba Medix Corp. (“Abba“), have facilitated the successful launch of MTL Cannabis dried flower SKUs through four (4) of the nine (9) Canadian provinces in which they currently have distribution relationships. The initial launch includes MTL Cannabis’s signature strain Sage n’ Sour as well as an exclusive offering of Cookies n’ Crème. Initial sales of MTL Cannabis SKUs through Abba and ICM’s sales licenses have been strong and reflect MTL Cannabis’ history as a top 5 selling dried flower SKU in almost all of the markets it has entered.
In addition to the above, MTL Cannabis has participated and has been successful in obtaining listings in various product calls from 3 of Canada’s largest recreational markets. These accepted SKUs have launch dates on Canada House’s licenses (ICM and Abba) between December 2021 and June 2022.
Medical LP Patient Growth – Over 1400 active patients
With respect to Abba’s medical platform, Canada House is pleased to announce that Abba has now more than doubled its registered patient count since January 2021, recently surpassing 800 registered veteran patients and 1,400 total medical patients. “Abba is committed to patient care through strength of choice in its online medical cannabis marketplace, with a focus on craft-quality product offerings including two veteran-specific dried flower cultivars,” commented Chris Churchill-Smith, CEO of Canada House. “As we work through the integration of Canada House and MTL Cannabis, this will continue to be a strong focus of our Company.”
Other Medical Cannabis Updates.
Abba and Canada House Clinics (“CHC“) have been working together to ensure Abba has the most effective portfolio of products which has allowed Abba to become the LP with the second highest number of Veterans amongst the twenty LP’s that CHC works with. With this growth and the previously reported acquisition of Margaree Health Group, CHC has grown from under 3,100 Veterans in January 2021 to over 3,800 Veterans. Abba and CHC will be expanding efforts in Quebec in the coming year, starting with the launch of Abba’s new bilingual shopping portal in Dec 2021.
Canada House announces that it has issued a $700,000 principal amount secured debenture (the “Debenture“) to DMMB (Pty) Holdings Ltd. in connection with a debt financing transaction. The Debenture has a two-year term and bears interest at 18% per annum. The proceeds from the issuance of the Debenture will be used for working capital purposes and for transaction costs.
The Company also announces that its board of directors has unanimously approved the extension of the expiry date of 97,342,857 (subject to adjustment) outstanding common share purchase warrants of the Company issued on March 4, 2020 (the “Warrants“) from March 3, 2023, to December 31, 2026. Aside from the extension of the expiry date, all other terms of the Warrants will remain unchanged. The extension of the Warrants is subject to acceptance by the CSE.
About MTL Cannabis:
MTL Cannabis is a privately owned Canadian License Holder located in Montreal, Quebec. As a flower-first company built for the modern street, MTL Cannabis is a 57,000 sq ft licensed facility with room to expand to 130,000 sq ft in the existing 2 buildings and possible expansion to over 300,000 sq ft. Under the existing footprint, the indoor facility uses proprietary hydroponic growing methodologies supported by handcrafted techniques to produce products that are truly craft for the masses. MTL Cannabis currently produces over 13,000 kgs annually, yielding over 2kg per light. With supply deals in nine Canadian provinces, the company is currently in the top 5 in dried flower sales in almost all markets.
About Canada House Wellness Group
Canada House Wellness Group is the parent company of Abba Medix Corp., a Licensed Producer in Pickering, Ontario that produces high quality medical grade cannabis; IsoCanMed Inc., a Licensed Producer in Louiseville, Québec growing premium cannabis in its 64,000 sq. ft. indoor production facility; Canada House Clinics Inc., with clinics across the country that work directly with primary care teams to provide specialized cannabinoid therapy services to patients suffering from simple and complex medical conditions; and Knalysis Technologies, a provider of fully customizable, cloud-based software that links physician, provider, and patient to data that supports treatment with medical cannabis.
Canada House Wellness Group’s goal is to become the leading cultivator of premium craft cannabis and provider of cannabinoid therapy, targeting the medical cannabis markets globally. Please visit www.canadahouse.ca or the Company’s public filings at www.sedar.com.
Cautionary Statement Regarding Forward-Looking Information. This press release contains forward- looking statements, including statements that relate to, among other things, the Company’s clinic, production and technology businesses, its future plans, the Company’s markets, objectives, goals, strategies, intentions, beliefs, expectations and estimates, and can generally be identified by the use of words such as “may”, “will”, “could”, “should”, “would”, “likely”, “possible”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “plan”, “objective” and “continue” (or the negative thereof) and words and expressions of similar import. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed on such statements. Certain material factors or assumptions are applied in making forward-looking statements, and actual results may differ materially from those expressed or implied in such statements. Material assumptions used to develop forward-looking information in this news release include, among other things, the closing of the transaction with Montreal Cannabis and the receipt of all necessary regulatory and shareholder approvals associated therewith, the regulations related to cannabis use under the Access to Cannabis for Medical Purposes Regulations and the act respecting cannabis and to amend the Controlled Drugs and Substances Act, the Criminal Code and other Acts, passed by the Canadian Federal government, making cannabis and cannabis based edibles, vapes and oils legal for recreational use on October 17, 2018 and October 17, 2019; Company liquidity and capital resources, including the availability of additional capital resources to fund its activities; level of competition; the ability to adapt products and services to the changing market; the ability…