Heritage Cannabis Holdings Corp.(CSE:CANN) (OTCMKTS:HERTF) said it has entered into an agreement to acquire all of the issued and outstanding equity of Opticann Inc., a Colorado-based oral and topical cannabinoid company for an initial consideration of up to C$5.0 million in common shares and warrants of Heritage.
Opticann, which was founded by several former executives of MedReleaf Corp. - a Canadian medical cannabis company that was acquired by Aurora Cannabis Inc. for $3.2 billion in 2018 - has the rights to exclusively sell CBD and CBG products made with the patented VESIsorb(R) drug delivery system for optimized absorption and stability.
The acquisition agreement additionally includes a series of possible earn-outs with a potential value of up to C$30.0 million contingent upon achieving significant financial and enterprise milestones over the next five years.
In a statement, Clint Sharples, CEO of Heritage said: "The acquisition of Opticann is a strategically significant move, and an important milestone for Heritage as we expand our expertise and look to advance our plan to grow our U.S. presence and participate in the rapidly growing multi-billion dollar U.S. CBD market.
"We are excited to have Opticann join the Heritage family and have the talented and proven medical cannabis executives and team members from the former MedReleaf as part of Heritage's future success. Heritage will also leverage Opticann's international experience and relationships with plans to build an international medical product sales footprint."
Opticann has a supply and distribution agreement with Geocann LLC, a global cannabis organization with the exclusive worldwide rights to the patented VESIsorb(R) delivery technology for cannabinoids, terpenes, and flavonoid formulations.
The agreement between Opticann and Geocann provides Opticann exclusive distribution rights to brand and market a select portfolio of VESIsorb(R) formulated oral and topical CBD and CBG products to major retailers that dominate the US food, drug, and mass retailer market, including CVS, Walgreens, Rite-Aid, and Walmart, among others.
VESIsorb(R) is a leading delivery system innovation for dramatically improving the stability and absorption (bioavailability) of natural ingredients like cannabinoids, and is backed by a robust body of supporting scientific evidence spanning several decades.
Neil Closner, Opticann chairman said: "The patented VESIsorb(R) technology enables the creation of next-generation CBD and CBG products that are proven to be far superior in performance over other products in the market. These products are backed by human clinical data published in a peer-reviewed scientific journal showing enhanced absorption and performance versus other CBD and hemp products."
"We are looking forward to bringing the Opticann team and this technology to Heritage and to successfully executing the business plan," Closner added.
The transaction is subject to customary closing conditions and is expected to be completed by the end of August 2020.
Heritage Cannabis is a vertically integrated cannabis company that owns two Health Canada approved licenced producers, Voyage Cannabis Corp. and CannaCure Corp., both of which also have industrial hemp licenses.
Additionally, Voyage recently received its sales license from Health Canada, and the Company will be launching its own products in the BC, AB, and MB markets in summer 2020, with other provinces to follow.
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