Lexaria Bioscience Corp (CSE:LXX) (OTCMKST:LXRP) announced Thursday that it has closed the sale of its non-pharmaceutical THC-related assets.
The biotechnology company has agreed last month to sell the assets owned by its subsidiary Lexaria Canpharm ULC for C$3.85 million to Hill Street Beverage Company Inc (CVE:BEER), in which Lexaria owns a large position.
Lexaria said the asset sale was one of the larger objectives needed as the company seeks to list its securities on a national US securities exchange.
READ: Lexaria Bioscience encouraged by study results using its DehydraTECH platform to deliver antiviral drugs
Under the purchase agreement, Lexaria has received C$350,000 in cash and 6,031,363 restricted common shares of Hill Street at C$0.0829 per share as the first required equity-based payment. It also has received a promissory note having a principal amount of C$2 million and bearing interest at the rate of 10% per annum, and a limited license to use the DehydraTECH technology outside of Canada and the US for certain non-pharmaceutical, therapeutic, and medicinal products that contain 0.3% or greater THC.
In addition, Lexaria said it will receive another C$1million worth of common shares of Hill Street over the next 16 months.
Lexaria said it retains ownership of the DehydraTECH technology (which Hill Street has acquired the right to use and sublicense for THC-related purposes) and all pharmaceutical applications of THC and other psychoactive cannabinoids. This transaction has no relevance on Lexaria’s separate CBD business nor any other Lexaria business division.
Hill Street intends to begin commercializing the intellectual property immediately through both licensing and B2B sales, as well as utilize Lexaria’s proprietary DehydraTECH process in its own brands while continuing to work with the existing THC licensee contracts it has now assumed from Lexaria.
“We believe this acquisition positions us to become both the taste and experience leader in Cannabis 2.0 products,” said Hill Street CEO Terry Donnelly in a statement.
Chris Bunka, chairman and CEO of Lexaria, added: “We can’t wait to see what Hill Street has up their sleeves with the full power of DehydraTECH supporting them. Lexaria is actively preparing to focus on working with global leaders in the delivery of drugs and active ingredients for treatment of conditions such as hypertension and viral diseases, together with its ongoing programs to develop superior non-combusted, oral forms of nicotine.”
Lexaria plans to focus on regulated pharmaceutical and medical market segments such as business segments relating to heart disease, reduced-risk non-combusted nicotine, antiviral drugs, and hemp-based CBD business-to-business applications.
Contact the author: email@example.com
Follow him on Twitter @PatrickMGraham