VANCOUVER, British Columbia, April 24, 2019 (GLOBE NEWSWIRE) -- Chemesis International Inc. (CSE: CSI) (OTC: CADMF) (FRA: CWAA) (the “Company” or “Chemesis”), has completed a definitive agreement in respect of the previously announced transaction (“Acquisition”) to acquire 100% of a fully-operational extraction and manufacturing facility in Cathedral City, California (“Facility”). The Acquisition will expand the Company’s processing ability to over 500,000 kg of cannabis annually.
The operational and revenue generating, state-of-the-art, Facility is fully licensed, and the closing of the Acquisition is expected to further the Company’s ability to extract THC, CBD and other cannabinoid and terpene products. The Facility utilizes a volatile BHO (‘Butane Hash Oil’) Extraction method that allows for rapid and efficient extraction of cannabinoids from trim. As a result, the Company will be able to provide extraction services for THC & CBD products through both ethanol and BHO extraction processes.
Additionally, the Company has entered into a binding agreement to increase its ownership interest in its flagship manufacturing facility pursuant to which it will acquire the remaining minority 20% interest it does not currently own (“Buy-Out Transaction”). The facility, which is also located in Cathedral City, California, holds a Type 7: Volatile Solvent Extraction & Manufacturing License and is fully operational, compliant with all regulations, and is revenue-generating.
With these transactions, Chemesis will continue to provide third party manufacturing for brands that are in need of high-quality extraction and multiple product types. Furthermore, the Company also offers brands, distribution, and transportation services through its Desert Zen facility which, increases efficiency and reduces wait times. Furthermore, these facilities will continue servicing Chemesis’ brands Jay & Silent Bob’s Private Stash and California Sap.
“Our operations in California have significantly expanded in capacity and capabilities, and the Company will continue to increase its distribution and manufacturing footprint in the state,” said CEO of Chemesis, Edgar Montero. “The state is moving to a regulated market that requires high-quality facilities and extraction processes, and we believe the Company has positioned itself to gain significant traction in a compliant marketplace. The Company also continues to see increasing demand for compliant services that are able to reduce cost, and delivery times by engaging a single operator.”
Under the terms of the Acquisition for the Extraction and Manufacturing facility, Chemesis will issue 4,654,000 common shares and pay $1,000,000 USD within 90 days of closing. To acquire the remaining minority 20% interest in the Company’s flagship facility, Chemesis will issue 1,000,000 common shares. All stock issued through these transactions is subject to 36-month leak-out restriction.