CNW Group
Symbol: TSX-V: LG
LGC Capital Ltd. (TSXV: LG) ("LGC") is pleased to provide an update on its investment in Tricho-Med Corporation (doing business as "AAA Trichomes") in Quebec, Canada.
AAA Trichomes is currently in the process of building its initial 34,000 square foot (Phase-1) Medical Cannabis production facility, located only twenty minutes south-west of Montreal's Mirabel International Airport. (See picture of location below - The red circle indicates the location.)
The construction of the first stage of this new state-of-the-art greenhouse is now underway and is scheduled to be completed by the fall 2018. AAA Trichomes is currently finalizing the selection of the turn-key contractors for the construction of the steel structure/outside envelope of the facility and is in the final process of choosing the Heating Venting and Air-Conditioning suppliers for the facility. The company has already commenced detailed planning for its Phase-2 and Phase-3 expansions that will advance the facility's overall size to over one million square feet of cultivating and processing capacity.
AAA Trichomes has also formally engaged Cannabis Compliance Inc., Canada's original cannabis consulting firm (www.cannabiscomplianceinc.com) to manage its compliance and licensing approvals. Cannabis Compliance Inc. has successfully guided a number of Canadian Medical Cannabis companies through the Health Canada approval process.
AAA Trichomes is on track for its Health Canada inspection by the fall of this year. The company expects to run its two trial harvests as soon as Phase-1 construction is complete, which is a condition to being granted a full growing and production license.
As per LGC's formal agreements with AAA Trichomes, LGC has now forwarded its second of four installments of CAD $1 million to AAA Trichomes to fund the construction. As reported in prior news releases, LGC entered into a four-year secured convertible loan agreement with AAA Trichomes in an amount of CAD $4 million, which will be disbursed in accordance with a pre-agreed milestone disbursement schedule. Upon AAA Trichomes obtaining a license to produce medical cannabis from the relevant regulatory authorities, the loan will convert into common shares of AAA Trichomes representing 49% of AAA's then-issued and outstanding shares. LGC will also receive a 5% royalty on AAA Trichomes' net sales.
John McMullen, CEO of LGC Capital stated, "We are very impressed with the AAA Trichomes' management team and their execution of their plans to date. Ultimately, we have great comfort in this Quebec-based opportunity and we see its potential to ultimately become a successful and sizeable Canadian medical cannabis growing operation."
LGC also announces that its Board of Directors has amended LGC's 2016 Stock Option Plan so as to increase the number of shares that can be issued thereunder to 71,230,957 shares, equal to 20% of the 356,154,788 LGC common shares issued and outstanding following the recent completion by LGC of its $8 million bought-deal private placement. The increase represents 12,294,231 additional common shares. The amendment to the 2016 Stock Option Plan is subject to approval of the TSX Venture Exchange and to shareholder approval, which LGC intends to seek at its next annual meeting.