TORONTO, July 15, 2019 /CNW/ – National Access Cannabis Corp. ("NAC" or "the Company") (TSXV: META), is pleased to announce that it has entered into a conditional share purchase agreement (the "Share Purchase Agreement") through Meta West Coast Ltd., a wholly-owned subsidiary of NAC, to acquire 19.9% of Sicamous Trading Company Incorporated ("STC") from the shareholders of STC (collectively, the "Vendors").
- Further solidifies NAC's position as the Canadian retail cannabis leader1 – adds British Columbia ("BC") exposure to the market in addition to the Company's 30 current licensed locations in Alberta, Saskatchewan and Manitoba.
- STC currently has one retail cannabis store licence application in process with the British Columbia Liquor and Cannabis Regulation Branch (the "LCRB").
- STC plans to add more locations over the next 12 months, building on the foundation of its first location in well-trafficked vacation spot, Sicamous BC, subject to receipt of required retail cannabis store licences.
- NAC has entered into a management agreement with STC whereby NAC will provide certain store development and operational services to support STC in its retail store development in exchange for management fees calculated as a set percentage of STC's store-level EBITDA for its first store and every successive store opened.
Mark Goliger, CEO of NAC commented, "We have been telling shareholders for some time that we see a significant opportunity to leverage NAC's deep operational expertise into accretive arrangements with other cannabis operators. NAC shareholders are expected to benefit from the Company's ownership stake in these innovative organizations, a high margin management fee income stream as well as incremental purchasing power as we continue to grow our leading Canadian network.
"I would like to personally welcome the Sicamous team to the NAC platform. Our team is excited about STC's first location in this resort town and to supporting the roll-out of additional locations."
– Mark Goliger, CEO of NAC
Pursuant to the Share Purchase Agreement, NAC will acquire 199,000 class "A" common shares (the "Purchased Shares") in the capital of STC, being 19.9% of the issued and outstanding shares in the capital of STC, in exchange for $200,000, payable by the issuance of common shares of NAC at a price of $0.53 per share (the "Consideration Shares") to be distributed pro rata among the Vendors (the "Transaction"). Upon execution of the Share Purchase Agreement, the Purchased Shares and the Consideration Shares are to be delivered to Alliance Trust Company, as escrow agent (the "Escrow Agent"), to be held in escrow until such time that STC acquires a retail cannabis store licence from the LCRB and the LCRB has approved the transfer of the Purchased Shares to NAC.
No commission, finder's fee or similar payment (whether in the form of cash, securities or an interest in assets) were paid by the Company in connection with the Transaction.
In connection with the closing of the Transaction, Consideration Shares will be issued to an Insider of the Company (as such term is defined under the policies of the TSX Venture Exchange). The participation of the Insider in the Transaction constitutes a "related party transaction" within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Company is relying upon exemptions from the formal valuation and minority approval requirements of MI 61-101 based on a determination that the fair market value of the Transaction, insofar as it involves the related parties, does not exceed 25% of the market capitalization of the Company. The Company was not in a position to file a material change report more than 21 days in advance of the closing of the Transaction, as the participation of the related parties was not confirmed at that time. The Transaction will not materially impact the percentage of securities of the Issuer held by the Insider and the Transaction will not have a material effect on the Company's business and affairs.
About National Access Cannabis Corp.
NAC is Canada's largest recreational cannabis retailer by provincial store count. With a portfolio of 28 retail locations nationwide, NAC is the leader in secure, safe and responsible access to legal recreational cannabis in Canada. Through its Canada-wide network of Meta Cannabis Supply Co.™ and NewLeaf Cannabis™ recreational cannabis retail stores and NAC Medical's cannabis clinics and pharmacy partnerships, NAC enables the public and registered patients to gain knowledgeable access to Canada's network of authorized Licensed Producers of cannabis. NAC is listed on the TSX Venture Exchange under the symbol (TSXV: META).
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