Great news !! LGC CAPITAL TO EXPAND GLOBAL FOOTPRINT IN MEDICAL CANNABIS MARKET THROUGH INVESTMENT IN JAMAICA'S GLOBAL CANNA LABS LIMITED
LGC Capital Ltd. has signed a letter of intent with rapidly developing Jamaican cannabis company Global Canna Labs Ltd. for a strategic investment in the Jamaican cannabis market as part of LGC's continuing international expansion.
The letter of intent with Global Canna Labs and one of its major shareholders provides that LGC will subscribe for a $2.5-million secured debenture, convertible into an initial 30-per-cent strategic interest in Global Canna Labs, and will also acquire a 5-per-cent royalty on Global Canna Labs' net sales for $2-million, payable in shares of LGC.
John McMullen, chief executive officer of LGC, commented, "This exciting transaction with Global Canna Labs will not only extend our global reach within the legalized cannabis industry, it will increase LGC's investment footprint into the lucrative Caribbean region. We believe that our investment will assist Global Canna Labs in achieving almost immediate production. The potential square footage, scale and expandability of this operation is significant and we look forward to working closely with Global Canna Labs and its highly experienced team to build something quite special in Jamaica."
Global Canna Labs CEO Paul Glavine states: "Today is a very significant day for the medical cannabis industry in Jamaica, with LGC today showing its strong financial commitment to jointly building a strong Jamaican brand in country and on the world stage. Jamaica has for a long time been very well positioned to become a leader in the medical cannabis industry. It has a long, rich and varied culture and a highly motivated population. Global Canna Labs has secured a strong board, highly specialized in security, medicine and business expertise in the country. We have developed deeply rooted ties with the leaders in the local economy, which will allow us to maximize our expected production capacity of 40,000 kilograms annually through our current Montego Bay facilities as quickly as possible. We are glad to announce this partnership with LGC and we share its Jamaican vision. With 20 years of combined industrial experience in cultivating medical cannabis, we are now focused on rapidly building out our operations and becoming the largest Caribbean producer of high-grade medical cannabis."
Transaction details:
The transaction comprises two parts:
- LGC will, by way of a secured convertible debenture, invest $2.5-million which will be disbursed in tranches in accordance with the achievement of milestones in Global Canna Labs' business plan;
- LGC will purchase a 5-per-cent royalty on Global Canna Labs' net sales for $2-million, payable in shares of LGC.
The debenture will have a four-year term, carry interest at an annual rate of 7 per cent and be secured by the assets of Global Canna Labs. The debenture will be convertible into common shares of Global Canna Labs and to be formed Canadian affiliate so as to comply with Jamaican foreign ownership rules, corresponding to a 30-per-cent ownership interest in Global Canna Labs. The debenture will be converted immediately prior to any liquidity event.
The royalty will also be secured by the assets of Global Canna Labs, which will have the right to repurchase the royalty for $6-million.
The letter of intent provides that LGC will carry out an accelerated due diligence review, to be completed by Feb. 15, 2018, and that upon successful completion of due diligence, the parties will enter into definitive agreements by Feb. 25, 2018.
Closing of the transaction with Global Canna Labs is also subject to the parties entering into definitive agreements and to standard closing conditions. The transaction is subject to regulatory approval, including that of the TSX Venture Exchange.
About Global Canna Labs
Global Canna Labs is a Jamaican entity with its head office located in Kingston, Jamaica, with operations based in Montego Bay, with plans to become one of the leading cultivators and processors in Jamaica of cannabis for medical and recreational purposes. Target production is expected to total 1,876 kg in 2018 and rising quickly to 7,741 kg annually by 2021. These production targets can be rapidly expanded from current targets should demand exceed supply.
The Montego Bay site comprises a 22-acre plot with an additional 80-acre expansion opportunity on the same plot. The location is only 10 minutes from the Montego Bay airport and seaport providing logistics access for facilitating global exports.
Global Canna Labs is in the final stages of acquiring a full commercial cannabis licence in Jamaica enabling clinical trials, dispensaries, recreational sale and medical export. On Dec. 20, 2017, the Cannabis Licencing Authority of Jamaica granted conditional approval for a cultivator's licence (Tier 3) (over five acres).
Construction of its first 58,000 square feet of greenhouses is in progress and is nearing completion, with four additional acres of outdoor growth and state-of-the-art processing facility meeting GMP and ISO standards in the current site plan. Security fencing around the initial cultivation site covering six acres in total has already been installed.
Construction of Global Canna Labs' first dispensary is expected to start in Q1 2018 in Montego Bay's Hip Strip. Plans are also in place for Global Canna Labs to open an on-site farm store and its first dispensary in Kingston by the end of 2018.
About LGC Capital Ltd.
LGC Capital is a Canadian incorporated public company listed on the TSX Venture Exchange. LGC's objective is to become a diversified business group with core business divisions that provide shareholders with exposure to a diverse range of businesses, products and services.
Information Relating to Global Canna Labs Ltd.
All information contained in this press release relating to Global Canna Labs Ltd. has been provided to LGC by Global Canna Labs Ltd. LGC has relied upon this information without having made independent inquiries as to its accuracy or completeness and assumes no responsibility for any inaccuracy or incompleteness of such information.