Empower Clinics Inc (OTCMKTS:EPWCF) (CSE:EPW), the medical cannabis clinic operator, revealed it has closed more than $2.9 million in debenture and equity financings to be used to complete strategic acquisitions and for working capital.
As part of the offerings, AgraFlora Organics International, a cannabis firm with a large-scale 2.2 million sq/ft greenhouse in British Columbia, has invested $1 million into Empower.
"As interest in cannabidiol (CBD) continues to expand both amongst the medical community and with retail consumers alike, we are excited to be making this strategic investment into Empower as they embark on this next phase of their growth plan," said AgraFlora CEO Derek Ivany.
Empower had the prospect of multiple near-term revenue streams and a robust clinic and patient network, he added, and was a compelling platform from which to build upon. Empower has now closed a private placing of unsecured convertible debentures amounting to $799,500 and another private placement of more than 21 million units at $0.10, for gross proceeds of $2.1 million.
"The strong support in our financing round demonstrates that shareholders and investors have faith in our ability to execute on initiatives, as we establish vertical integration, connecting patient efficacy in our clinics with a diverse CBD product strategy and the backing of the science of extraction, all driven by data and analysis," said Steven McAuley, Empower's chairman and CEO.
Empower is rapidly expanding its clinic network and significant expansion opportunity, not least to its announced acquisition of the Sun Valley franchise model, the firm expects it will grow its total patient list substantially in the years ahead.
The company has also started selling its own line of CBD-based products called Sollievo via its network of company-owned clinics in the US.
US Farm Bill creates opportunity
Notably, the passing in the US of the US$867 billion Agriculture Improvement Act, otherwise known as the Farm Bill, has legalized hemp and hemp-based products, which Empower says has created an opportunity for the production and sale of a variety of CBD-based products that can provide genuine help and effective relief to millions of people suffering from a variety of qualifying conditions.
Recent studies have indicated the approval of the Farm Bill could create a US$20 billion industry by 2022.
The company intends to open a hemp-based CBD extraction facility in greater Portland, Oregon in the second quarter of this year, with the first extraction system expected to have capacity to produce 6,000 kg of product per year.
Empower has struck a deal with Aibeida LifeTech Ltd. (Aibeida), whereby Aibeida has agreed to: sell and license specialized extraction equipment to Empower; provide facility build-out and set-up services; complete licensing and permitting requirements; perform equipment set-up, testing and activation; and provide ongoing facility management and maintenance.
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