(via TheNewswire)
TORONTO, Ontario-March9,2020 - TheNewswire - BiomeGrowInc. ("Biome"orthe "Company")(CSE:BIO)(Frankfurt:6OTA)(OTCQB:BIOIF) isannouncing,inlightofcurrent marketdynamics,changestoanumberofitspreviouslyannounced initiatives,strategic investments, andproposedrelationships, includingRedSandsCraftCannabis,WeedVR,its businessrelationship withCBDAcres,itspartnership withSt.FrancisXavierUniversity,the expansionofitsHighlandGrowfacility,anditsinvestments inBackHomeandGreatLakes Cannabis.
"Thecannabismarkethaschangedsignificantly overthepastyear,andwerecognizethatour initialcapital-intensive strategynolongermakessenseinthisenvironment,"sharedKhurram Malik, CEO of Biome Grow, "as a result, we have had to make difficult decisions in order to move thebusinessinadifferentdirection.Weareworkingcloselywithstakeholders andcreditorsas Biome is straddled with significant liabilities and obligations in connection with these projects."
Red Sands
RedSandsCraftCannabisCompanyInc.("RedSands")isawhollyownedsubsidiaryofthe
Company. ItwasincorporatedonOctober19,2018,underthelawsofPrinceEdwardIsland
("P.E.I."), and was initially conceived asbeing avehicle toservice the local and tourist market in P.E.I.withlocallyproduced andregionally growncannabis products. TheCompany haselected nottopursuetheRedSandsinitiative. Nosignificant writedownsareexpected asthebusiness had not begun execution on its proposed extraction facility.
Weed VR
TheCompany acquired WeedVirtualRetailInc.("WeedVR")onJune11,2018.WeedVRwas conceivedasamulti-platform virtualcatalogsystemdesignedtoeducate,engageandinform consumer cannabispurchases. Givencurrentmarketconditions, theCompanyhasdecidednot tofurtherpursuetheseobjectives. TheCompanyexpectstowritedownthisassettozeroinits Year End ("YE") financial statements.
CBD Acres
On February 12, 2019, the Company entered into a memorandum of understanding ("MOU") with CBD Acres Manufacturer Inc. ("CBD Acres"), to provide the Company with preferential access to cannabidiol("CBD")concentrate.The Companyand CBDAcreshavemutuallyagreedto terminatetheMOU.Biomedoesnotplantopursuephysician-led medicalcannabisand/or cannabinoid clinics related thereto at this time. In addition, all previously announced international opportunities in which Biome had planned to market medical CBD are no longer being pursued.
Partnership with St. Francis Xavier University
On December 5, 2017, the Company entered into a partnership with St. Francis Xavier University
("StFX") in respect of a multi-dispensary three year collaboration to conduct a range of cannabis- based research initiatives.Given current market conditions and capital constraints, the Company hasdecidednottopursueanyresearch-based initiativesatthistime,andisterminatingits partnership with StFX.
Expansion of Highland Grow Facility
HighlandGrowInc.("Highland Grow")isawhollyownedsubsidiaryoftheCompanybasedin Antigonish, NovaScotiathatislicensedtocultivate,process,andsellcannabisunderthe Cannabis Act (Canada). Biome had previously announced an intention to expand the Nova Scotia facility, butasaresultofcurrent market realities, ithasdecided nottocomplete thatexpansion. Consequently, theCompanyhasmadeanearlyrepaymentof$1millionofthe$3milliondebt financingannouncedinNovember 2019,whichwasheldintrustandearmarkedspecifically for this expansion. The remaining loan principal is now $2.03 million.
Strategic Reviews of Back Home and Great Lakes Cannabis
Biome hastwowhollyowned subsidiaries thatarelatestageapplicants under theCannabis Act (Canada), whichhavenotyetbeengrantedlicensesundersuchAct:TheBackHomeMedical Cannabis Corporation ("Back Home") and Great Lakes Cannabis Company Inc. ("Great Lakes"). Givencurrentmarketdynamics, andtheinvestment neededtocomplete thefacilities relatingto these license applications, the Company is undertaking a strategic review of these investments.
With respect toBack Home, the Company isexploring various options inacollaborative manner withitsstakeholders. Intheinterim,theCompanyhaseliminatedunderutilizedpositionsand redeployed the balance towards Highland Grow initiatives within Newfoundland and Labrador.
With respect to Great Lakes, the Company has halted all construction at the Great Lakes facility; reduced itsheadcount tozero;andexpects toincurasignificant writedownontheGreat Lakes assets in its YE financial statements.
About Biome
Biome, throughitswholly-ownedsubsidiary, HighlandGrow, islicensed to cultivate, process,andsell cannabis.
Investor Relations: investors@biomegrow.com
Forward-looking Statements
This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. These statements relate to future events or future performance. All statements
otherthanstatementsofhistoricalfactmaybeforward-lookingstatementsorinformation. Generally,
forward-lookingstatementsandinformationmay be identifiedbytheuseofforward-lookingterminology suchas"plans","expects"or"doesnotexpect","proposed", "isexpected", "budgets", "scheduled", "estimates","forecasts","intends", "anticipates" or"doesnot anticipate", or "believes", orvariationsof such wordsandphrases, orbytheuseof wordsorphraseswhichstate that certainactions,eventsorresults may, could, would, or might occur or be achieved. Such forward-looking statements and information reflect management'scurrent beliefsandarebasedonassumptionsmadebyandinformation currentlyavailable toBiome.Theseforward-lookingstatementsare subjectto risksanduncertaintiesthatmaycauseactual results to differmaterially from those expressed or implied in the forward-looking statements, including changesto legislation; changesincannabisresearchorthegeneralpublic'sperceptionof cannabis;crop failure;labour disputes;increasesinlabourand/orconstruction costs;risingenergycosts;aninabilityto accessfinancingasneeded; andgeneraleconomicdownturn. Readersarefurthercautionednot to place undue reliance onforward-lookingstatementsastherecan benoassurancethat the plans, intentionsor expectations upon whichtheyareplacedwilloccur.Suchinformation, although consideredreasonableby management at the timeofpreparation, mayproveto beincorrect andactualresultsmaydiffermaterially from those anticipated. The forward-looking statements speak only as of the date on which they are made, andBiome, oranyofitssubsidiaries undertakesnoobligationtoupdateorreviseanyforward-looking statementswhetherasaresult of newinformation, futureeventsorotherwise, exceptasrequiredbylaw. Theforward-looking statements containedinthisnewsreleaseareexpressly qualifiedbythiscautionary statement.
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