TORONTO, ONTARIO--(Marketwired - July 11, 2016) - Nutritional High International Inc. (the
"Company" or "Nutritional High") (CSE:EAT)(OTCQB:SPLIF)(FRANKFURT:2NU) wishes to provide a
shareholder update to summarize the Company's business development over the last few months and the milestones that we have
achieved at the project and the corporate level.
In the last few months the Company has augmented its board and management team by adding a new COO, Jim Frazier, who has been
instrumental in reducing construction costs in Colorado, advancing our Pueblo Project and instituting other operational changes;
a new CFO, Amy Stephenson, the former CFO of Bedrocan; and new director, Robert Keeler who has significant operational experience
in the food manufacturing industry.
We have made significant progress regarding Phase I construction at the main facility on our Pueblo property, and have
re-configured the equipment plan to allow Palo Verde to manufacture products with the attributes that are highly sought after in
the Colorado market. Phase I is predominantly focused on developing a portion of the building to allow Palo Verde to launch its
oil extraction business and to ensure that the mechanical, structural and security features provide an environment conducive for
equipment installation and safe food manufacturing. We're also evaluating the possibility of launching the artisanal line, upon
completion of Phase I. The space dedicated for Phase I is expected to occupy 20% of the total space at Pueblo facility and
provides sufficient space to expand the extraction operation to include other methods (other hydrocarbon extraction, CO2 and
lipids based methods) and manufacturing of edible products on semi-automated basis.
With the build out firmly underway the Company expects the completion of Phase I build-out by the end of summer 2016 with the
equipment installation and inspections to follow. All equipment has been ordered and the timing of Palo Verde's production launch
will depend on the timing of local inspections, expected to occur shortly after completion of construction. We will continue to
post to our social media pages key points of information along with other critical developments of the ongoing construction as we
move closer to full scale operations.
Palo Verde will employ a short-path distillation technology to purify its cannabis oil extracts and remove deleterious
compounds such as pesticides and residual solvents; separate chlorophyll from the final product and isolate terpenes. The product
has been dubbed as "Clear" in the industry due to its transparency and quality. The processing method uses ethyl alcohol as a
solvent to manufacture extracts, which is less volatile and safer for human consumption, compared to other solvents.
The process selected by Nutritional High also provides for significantly higher processing capacity as the mechanical
separation portion of the process enables pre-extraction of cannabinoids, which in turn increases the overall throughput. The
equipment sourced by Nutritional High will also have custom modifications to fit our specifications.
With Nutritional High's support, Palo Verde continues to take steps to establish operations, which includes sourcing key
personnel to operate the Pueblo facility, securing potential sources of trim and shake to be used for manufacturing extracts, and
developing a market roll-out strategy. Palo Verde's production economics are estimated as follows:
- The processing technology is able to process up to 50 lbs of trim/shake per day, which in Colorado is estimated to cost
~$400/lb to purchase from growers;
- The extraction yield is expected to be 8%;
- Good quality oil extract sells for ~$25/g on the wholesale market ("Clear" typically goes for higher);
- Overhead cost to operate the facility is estimated at $30,000 per month;
- There is potential to increase margins by infusing the oil extract into gelatin caps, vape pens and tinctures, which are
higher value add products and where the "effective" value per gram is significantly higher than $25/g. For example, a
disposable vape pen with 250mg of THC content is sold for $10-15/piece on the wholesale market;
- The margins for edibles are even higher, as the average price for a package with 100mg, sells for $10-15/piece on the
wholesale market.
Nutritional High will secure revenue from Palo Verde through multiple streams including rent, interest payments, and through
the sale of branded packaging.
Nutritional High has also made strides financially, taking the steps to secure the necessary financing to execute the projects
and provide sufficient working capital for operations. The Company has completed a re-financing of its Pueblo property, which has
provided over USD $600,000 for capital expenditures and working capital. We are also continuing towards clearing the F-1
prospectus with the SEC, which would provide the Company access to an additional USD $1 million in equity financing from Kodiak
Capital. We also continue to seek out other non-dilutive sources of financing such as equipment loans, which would minimize
external equity capital requirements to execute our work plans. Lastly, as a part of our Illinois joint-venture, our partners
have agreed to contribute USD $300,000 to advance our dispensary project, which provides the capital necessary to complete the
build-out and commence operations.
We also continue to be encouraged by the market conditions in Illinois, where Amendment 3 to Senate Bill 10, was recently
passed. This measure extends the state's medical cannabis pilot program by an additional 2 1/2 years, to July 1, 2020, and
expands the list of qualifying conditions, to include post-traumatic stress disorder ("PTSD"). PTSD is the only
medical condition that was approved for a research study by the US Drug Enforcement Administration ("DEA") in
context of medical cannabis.
Also as part of the legislative change, in order for a patient to receive their medical marijuana card, their doctor must no
longer "recommend" the use of cannabis. Instead, their doctor must simply certify that a legitimate doctor-patient relationship
exists, and that the patient in question has a qualifying condition. This change is expected to accelerate growth of the patient
count in the State.
These changes provide for improved access to medical cannabis in the State of Illinois and in the Company's view expands the
potential patient base, further improving the fundamentals of the Company's business prospects in the State.
We've made a decision to move the location of the dispensary to Effingham, IL, which is
located in a high traffic regional business and retail district with several
major big box retailers within minutes of the major highway exit.
Lastly, we continue to monitor regulatory environment in different jurisdictions in an effort to identify the opportunities to
continue expanding the Company's operations in a manner accretive to the shareholders. We are keeping a close eye on Oregon,
Maryland, Arizona, Nevada, Washington, California, as well as Canada and a few other counties for potential developments where
Nutritional High is in a position to capitalize on the regulatory shifts in a cost effective manner. We continue to pursue
expansion strategies according to the mandate set out in the past, and will provide updates as the significant developments are
available.
We hope that we have answered some of the questions posed by investors in the last few months and clarified the corporate
direction of Nutritional High. The management is excited about the prospect of finishing construction at Pueblo and allowing Palo
Verde to commence commercial production of oils extracts and MIPs.
About Nutritional High International Inc.
Nutritional High is focused on developing, manufacturing and distributing products and nationally recognized brands in the
hemp and marijuana-infused products industries, including edibles and oil extracts for nutritional, medical and adult
recreational use. The Company works exclusively through licensed facilities in jurisdictions where such activity is permitted and
regulated by state law.
For updates on the Company's activities and highlights of the Company's press releases and other media coverage, please follow
Nutritional High on Facebook,
Twitter, Instagram and Google+.
NEITHER THE CANADIAN SECURITIES EXCHANGE NOR OTC MARKETS GROUP INC, NOR ITS REGULATIONS SERVICES PROVIDER HAVE REVIEWED OR
ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
This news release may contain forward-looking statements and information based on current expectations. These statements
should not be read as guarantees of future performance or results. Such statements involve known and unknown risks, uncertainties
and other factors that may cause actual results, performance or achievements to be materially different from those implied by
such statements. Such statements include submission of the relevant documentation within the required timeframe and to the
satisfaction of the relevant regulators, completing the acquisition of the applicable real estate and raising sufficient
financing to complete the Company's business strategy. There is no certainty that any of these events will
occur. Although such statements are based on management's reasonable assumptions, there can be no assurance that such
assumptions will prove to be correct. We assume no responsibility to update or revise them to reflect new events or
circumstances.
Company's securities have not been registered under the U.S. Securities Act of 1933, as amended (the
"U.S. Securities Act"), or applicable state securities laws, and may not be offered or sold
to, or for the account or benefit of, persons in the United States or "U.S. Persons", as such term is defined in Regulation S
under the U.S. Securities Act, absent registration or an applicable exemption from such registration requirements. This press
release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the
securities in the United States or any jurisdiction in which such offer, solicitation or sale would be unlawful.
Additionally, there are known and unknown risk factors which could cause the Company's actual results, performance or
achievements to be materially different from any future results, performance or achievements expressed or implied by the
forward-looking information contained herein. All forward-looking information herein is qualified in its entirety by
this cautionary statement, and the Company disclaims any obligation to revise or update any such forward-looking information or
to publicly announce the result of any revisions to any of the forward-looking information contained herein to reflect future
results, events or developments, except as required by law.