FORT LAUDERDALE, Fla., July 16, 2019 (GLOBE NEWSWIRE) -- Kaya Holdings, Inc. (OTCQB:KAYS), an integrated retailer and producer of legal medical and recreational cannabis products, welcomed the ruling of Florida state appellate court potentially opening up the Florida cannabis market to broader competition. The Company has responded by initiating plans to bring its popular Kaya Shack™ retail and product brands to Florida.
The First District Court of Appeal ruled that the distribution of legal medical cannabis licenses in Florida, Kaya Holdings’ home state, was conducted in disregard to a constitutional amendment approved by the state voters, which envisioned a broader and more competitive market.
While the Court’s ruling is subject to appeal to the Florida Supreme Court, Governor Ron DeSantis has characterized the current system a “cartel” that needs to be broken up in order to honor the will of the people, and has stated that he plans to drop appeals in other marijuana-related cases regarding limited licensing and vertical integration.
“Kaya has been waiting for the Florida market to open up. We were extremely active in the initial effort to pass the amendment and were disappointed when state officials chose to make acquisition of a license extremely difficult. We have been waiting for the change and expect to move quickly once a new licensing process is announced,” commented KAYS CEO Craig Frank. “Our plan includes expansion of Kaya Farms™ to Florida and the potential introduction of Kaya Shack™ brand retail outlets either directly or through potential franchises, as well as our brands of concentrates, edibles, topicals and accessories.”
Kaya Holdings to Initiate Capital Raising Effort Via Rule 506(c) Offering to Capitalize KAYS for Expansion and Launch Kaya Brands International
Kaya Holdings is in the process of structuring and preparing offering documentation for a private offering under Rule 506(c) of Regulation D. The Company may seek to raise up to $15 million to fund expansion of its domestic operations, as well as launching franchise sales in Canada. The proceeds are expected to be used for expansion and completion of the Company’s production capabilities, the launch of Kaya brand products, expansion of the Kaya Shack™ footprint, support of a franchise operating infrastructure, development of other foreign opportunities, and enhancing Kaya Holdings’ traditional role as an industry pacesetter.
We intend to structure the capital raise in a manner to limit dilution to current investors, while allowing them to benefit from our deployment of new capital to fund growth. While we have not finalized the structure and terms of the offering, we anticipate that it will include both shares of KAYS stock as well as shares in Kaya Brands International, the majority-owned subsidiary we intend to form for our planned Canadian business operations, with a view to it potentially being listed on the Canada Securities Exchange (the “CSE”).
“In Q-1 2019, Cannabis and related issuers remained the most active sector for capital raising on the CSE, closing on gross proceeds of approximately $550 million through 81 individual financings,” stated W. David Jones, KAYS Senior Advisor for Business Development, Licensing and Financial Operations. “Given the intent by KAYS to launch its planned Canadian franchising operations through a majority-owned subsidiary, accessing the CSE makes sense as we believe that it has become an excellent source of new institutional and retail investment capital and liquidity for US-based OTC Cannabis Stocks.”
Kaya Holdings Conference Call Update. The Kaya Holdings Annual Shareholder Call, originally slated for late December 2018/early January 2019 was postponed due to pending developments with our International division and opportunities in Canada. We apologize for the delay. Interested parties are advised to go to www.kayashack.com and register for KAYS updates; a confirmation email and participation code will be sent out to all shareholders and interested parties as soon as the date is set.
About Kaya Holdings, Inc. (www.kayaholdings.com) and the Kaya Shack™ brand (www.kayashack.com) of licensed medical and recreational marijuana stores:
KAYS (OTCQB: KAYS), through subsidiaries, produces, distributes or sells legal premium medical and recreational cannabis products, including flower, concentrates and oils, and cannabis-infused foods. In 2014, KAYS, became the first publicly traded company to own and operate a Medical Marijuana Dispensary. KAYS has expanded and presently operates three Kaya Shack™ OLCC licensed marijuana retail stores to service the legal medical and recreational marijuana market in Oregon (www.kayashack.com), has developed its own proprietary Kaya Farms™ strains of cannabis, which it grows and produces (together with edibles and other cannabis derivatives) at its Eugene, Oregon Sunstone Farms legal recreational and medical marijuana production and processing manufacturing facility, which it acquired in October 2018 and is operating pursuant to a management agreement pending OLCC approval to reissue the license to MJAI Oregon 1, LLC (KAYS’ main Oregon Operating Subsidiary).
The Company also owns a 26-acre parcel in Lebanon, Linn County, Oregon, which it purchased in August 2017 on which it intends to construct a cultivation and production facility. We filed for zoning and land use approval in early 2018, and after numerous regulatory challenges and delays, we finally received zoning and land use approval in January, 2019 to build an 85,000-square foot Kaya Farms™ greenhouse grow and production facility. Kaya Farms has begun designing the facility for maximum production of approximately 100,000 pounds annually, should recent efforts by Oregon state officials to enable export, or Federal decriminalization permit Oregon cannabis farms to maximize capacity.
The Company maintains a genetics library of over 30 strains of cannabis it has developed and has also formulated various edibles, cannabis derivatives and marijuana cigarettes under the “Kaya” brand name.
Oregon has “paused” the acceptance of new license applications, but the law allows the existing licenses to be sold and/or moved from one physical location to another. KAYS is presently evaluating how best to utilize these assets to form a network that will not only maximize our penetration of the Oregon Cannabis market but serve as the backbone to grow our U.S. Operations across state lines through the rollout of proprietary brands. KAYS has initiated paperwork with the OLCC to temporarily close one of the three outlets in Salem (store #3 in North Salem) and hopes to move that license to its Eugene, Oregon Sunstone Farms legal recreational and medical marijuana production and processing facility where it would be operated as a Kaya Farms Store™ which would allow it to also serve as a delivery hub to service the City of Eugene.
Additionally, the Company is exploring opportunities to expand its operations beyond Oregon by replicating its Kaya Shack™ brand retail outlets through franchising in other states where recreational cannabis use is legal or expected to become legal in the near term, as well as in Canada, where it is legal nationwide.
KAYS has retained the Toronto, Canada based law firm of Garfinkle Biderman, LLP to prepare the Franchise Disclosure Documents (“FDD”) and related items for the sale of Kaya Shack™ Cannabis Store franchises in Canada, which is the only G7 country that has legalized both medical and recreational cannabis production, sale and use on a national level. KAYS is near completion of negotiations with a leading franchise and real estate brokerage firm to lead the initial effort, which will most likely begin in the Province of British Columbia, and advance to other Provinces as license allocations are developed by the Canadian authorities. We expect the franchise sale and placement effort throughout Canada to progress over the next 3-18 months. KAYS plans to ultimately expand its franchise operations to the U.S., as regulations and laws permit.
IMPORTANT DISCLOSURE: KAYS is planning execution of its stated business objectives in accordance with current understanding of State and Local Laws and Federal Enforcement Policies and Priorities as it relates to Marijuana (as outlined in the Justice Department's U.S. Attorney General Jeff Sessions Memo dated January 4, 2018, and subsequent commentary from the U.S. Attorney for the District of Oregon Billy Williams), and plans to proceed cautiously with respect to legal and compliance issues. Potential investors and shareholders are cautioned that KAYS and MJAI will obtain advice of counsel prior to actualizing any portion of their business plan (including but not limited to license applications for the cultivation, distribution or sale of marijuana products, engaging in said activities or acquiring existing Cannabis production/sales operations). Advice of counsel with regard to specific activities of KAYS, Federal, State or Local legal action or changes in Federal Government Policy and/or State and Local Laws may adversely affect business operations and shareholder value.
Forward Looking Statements
This press release includes statements that may constitute "forward-looking" statements, usually containing the words "believe," "estimate," "project," "expect" or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, acceptance of the Company's current and future products and services in the marketplace, the ability of the Company to develop effective new products and receive regulatory approvals of such products, competitive factors, dependence upon third-party vendors, and other risks detailed in the Company's periodic report filings with the Securities and Exchange Commission. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release.
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