News : 3 YR Supply Agreement Emblem Announces $3 Million Strategic Equity Investment in Natura Naturals and 9,000 kg Supply Agreement over three years
TORONTO, July 18, 2018 (GLOBE NEWSWIRE) -- Emblem Corp. (TSXV:EMC) (TSXV:EMC.WT) (OTCBB:EMMBF) (“Emblem” or the “Company”), announced today that it is making a strategic equity investment (the “Equity Investment”) into Natura Naturals Inc. (“Natura”), a 662,000 square foot licensed greenhouse cultivator of medical cannabis pursuant to Health Canada's Access to Cannabis for Medical Purposes Regulations ("ACMPR"). The companies have also signed a three-year cannabis supply agreement (the “Agreement”) to provide Emblem up to 3,000kg of high-quality cannabis flower per year from Natura’s Phase 1 cultivation facility.
Based in Leamington, Ontario, Natura employs proprietary processes to produce high-quality cannabis in its state-of-the-art greenhouse facility. The first 155,000 square feet of the facility is currently being converted as part of its Phase 1 retrofit and is expected to be complete in August 2018 and capable of producing 15,000kg of cannabis per year. The Phase 2 conversion will retrofit the remaining 507,000 square feet for cannabis cultivation and is expected to bring total production capacity to approximately 70,000kg per year by mid-2019. Natura holds a genetic library of 32 cannabis strains, which will be made available to Emblem.
Equity Investment
Under the terms of the Equity Investment, Emblem will invest $3,000,000 in cash in Natura for 3,750,000 common shares of Natura and 3,750,000 common share purchase warrants exercisable at $1.05 for 24 months (subject to acceleration provisions). Post-closing, Emblem will own approximately 5% of Natura’s outstanding shares on a non-diluted basis, and 7% on a fully diluted basis. Closing of the Equity Investment is subject to customary conditions and is expected to close later this week.
“We are extremely excited about the opportunities that our new-found Emblem partnership holds for us. With our first commercial LP sale, the future growth, venture possibilities, and business transactions that lie ahead for Natura seem very promising,” said Ben Nikolaevsky, President and CEO of Natura Naturals.
Supply Agreement
Emblem has signed a three-year supply agreement with Natura pursuant to which Natura will supply Emblem with up to 3,000 kg of high quality dried cannabis flower per year at preferred wholesale pricing. Initial product deliveries to Emblem are expected to commence in October, 2018 with a total of 750kg deliverable for the balance of 2018. The Agreement increases Emblem’s total available cannabis by approximately 37.5% in 2018, and significantly accelerates Emblem’s product availability to coincide with the launch of the adult-use market in October 2018.
“Our partnership with Natura quickly accelerates our time to market, with an immediate increase in product volume, supporting both our medical and adult-use demand,” said Nick Dean, President and CEO of Emblem. “We have been very impressed with the Natura leadership team, their cultivation capabilities, and the quality of production they are achieving within their Phase 1 retrofit. Emblem has found a valuable partner in Natura and we are confident our relationship will continue to strengthen and grow as Natura completes Phase 2 of their retrofit, bringing online an additional 55,000 kgs of production in 2019