Christina Lake Cannabis Corp. (CSE: CLC) (OTCQB: CLCFF)
(FRANKFURT:CLB), (the “Company” or “Christina Lake Cannabis” or
“CLC”), a leading producer of high quality extracts and sun grown
cannabis, is pleased to announce it has completed the acquisition
of certain assets from a private British Columbia corporation (the
"Vendor"). The previously announced transaction includes acquiring
ownership of outdoor cultivation facilities in Midway, British
Columbia, related harvesting and manufacturing equipment, and
approximately 19,000 kg. of biomass (the "Transaction") for a total
purchase price of $3,000,000 (the "Purchase Price").
“This acquisition will solidify our position as
a key supplier to the country’s top brands,” said Mark Aiken, Chief
Executive Officer of Christina Lake Cannabis. “We are expanding our
growing capability to meet rising customer demand. The increased
capacity is a catalyst for robust topline growth and improved
profitability by harnessing economies of scale. As the demand for
our products has continued to grow over the last 2 years, we have
had to supplement our own cultivation with tens of thousands of
kilos of biomass supply from the wholesale market. The Midway
acquisition secures our supply chain providing CLC with cost
certainty and solid control over input quality.”
The Midway property represents a total of 342
acres, with slightly over 100 acres of licensed cultivation space.
With this acquisition, CLC will expand its total licensed outdoor
cultivation footprint to over 120 acres. Potential further
expansion of additional acreage is available and could be licensed
by the Company should the demand arise.
“Over the last 18 months CLC has focused on
operational efficiencies and investment in their processing
infrastructure,” said Jay McMillan, Chairman of the Christina Lake
Cannabis Board of Directors. “This has resulted in increased
productivity and expanded capacity. The investment in the Midway
property now aligns CLC’s cultivation and processing capability,
positioning the company for future growth.”
The first 80-acre crop of propriety CLC strains
will be planted in the spring of 2024 with expansion to the full
100 acres planned for 2025. The Company will leverage the strength
of their genetic development and outdoor cultivation skills to
support the additional growth. CLCs products are leveraged by
brands across the Canadian Cannabis market to manufacture vapes,
edibles, pre-roll and infused pre-roll products for both the
recreational and medical markets.
The Purchase Price for the acquisition was paid
through the issuance of a secured convertible promissory note
having a 5-year term (“Note”). The Note is secured by the land and
buildings acquired in the Transaction. The Note bears interest at a
rate of 10% per annum for year 1, 15% per annum for year 2, and 20%
per annum for the remaining 3 years. Repayment of the Note shall be
interest only payments paid annually on February 9, 2025 and
February 9, 2026, then quarterly interest payments thereafter and
$1,000,000 principal repayments on or before each of February 9,
2027, 2028 and 2029 until the remaining principal amount of the
Note is satisfied in full. Outstanding principal and unpaid
interest from the Note may be convertible into common shares of CLC
("Common Shares") at a conversion price of $0.05 per Common Share
during the Term. The Vendor shall have the right to convert the
Note at any time, subject to a notice period. Additionally, the
Company shall have the right to repay the Note at any time during
the Term together with prepayment of any remaining interest payable
under the Note. The definitive agreement for the Transaction also
provides the Vendor with a right to nominate a member to CLC's
board of directors for so long as the conversion of the Note
(together with any Common Shares then held by the Vendor) would
result in the Vendor holding 10% or more of the Common Shares. No
finder’s fee were payable with respect to the Transaction.
A copy of the definitive agreement for the
Transaction will be available under the Company's profile on SEDAR+
at www.sedarplus.com.
About Christina Lake Cannabis
Corp.
Christina Lake Cannabis is a licensed producer
of cannabis under the Cannabis Act. It has secured a standard
cultivation license and corresponding processing amendment from
Health Canada (March 2020 and August 2020, respectively) as well as
a research and development license (early 2020). Christina Lake
Cannabis’ facility consists of a 32-acre property, which includes
over 950,000 square feet of outdoor grow space, offices,
propagation and drying rooms, research facilities, and a facility
dedicated to processing and extraction. Christina Lake Cannabis
also owns a 99-acre plot of land adjoining its principal site. CLC
focuses its production on creating high quality extracts and
distillate for its B2B client base with proprietary strains
specifically developed for outdoor cultivation to enhance
extraction quality.
On behalf of Christina Lake
Cannabis:
“Mark Aiken”Mark Aiken, CEO
For more information about CLC, please
visit: www.christinalakecannabis.com
Jennifer SmithInvestor Relations and Media
Inquiriesinvestors@clcannabis.com902-229-7265
THE CANADIAN SECURITIES EXCHANGE (“CSE”) HAS NOT
REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ACCURACY OR
ADEQUACY OF THIS RELEASE, NOR HAS OR DOES THE CSE’S REGULATION
SERVICES PROVIDER.
This News Release includes certain
"forward-looking statements" which are not comprised of historical
facts. Forward-looking statements include estimates and statements
that describe the Company’s future plans, objectives or goals,
including words to the effect that the Company or management
expects a stated condition or result to occur. Forward-looking
statements may be identified by such terms as “believes”,
“anticipates”, “expects”, “estimates”, “may”, “could”, “would”,
“will”, “likely”, “probably”, “often”, or “plan”. Since
forward-looking statements are based on assumptions and address
future events and conditions, by their very nature they involve
inherent risks and uncertainties. Although these statements are
based on information currently available to the Company, the
Company provides no assurance that actual results will meet
management’s expectations. Risks, uncertainties and other factors
involved with forward-looking information could cause actual
events, results, performance, prospects and opportunities to differ
materially from those expressed or implied by such forward-looking
information. Forward looking information in this news release
includes, but is not limited to: future growth potential of the
Company, the anticipated results from the Transaction and the
Transaction being financially accretive and strategically valuable
to the Company, the results of the processing, the 2024 outdoor
grow season, any potential future expansion, the Company’s
objectives, goals or future plans, statements, harvesting results,
and estimates of market conditions. Factors that could cause actual
results to differ materially from such forward-looking information
include: fluctuations in general macroeconomic conditions,
fluctuations in securities markets, fluctuations in cannabis
markets, expectations regarding the size of the future harvest, the
ability of the Company to successfully achieve its business
objectives, plans for expansion, inability to obtain adequate
insurance to cover risks and hazards and general market conditions.
Additional factors and risks including various risk factors are
discussed in the Company’s disclosure documents which can be found
under the Company’s profile on https://www.sedarplus.com. Should
one or more of these risks or uncertainties materialize, or should
assumptions underlying the forward-looking statements prove
incorrect, actual results may vary materially from those described
herein as intended, planned, anticipated, believed, estimated or
expected.
Although the forward-looking statements
contained in this news release are based upon what management of
the Company believes, or believed at the time, to be reasonable
assumptions, the Company cannot assure shareholders that actual
results will be consistent with such forward-looking statements, as
there may be other factors that cause results not to be as
anticipated, estimated or intended. Readers should not place undue
reliance on the forward-looking statements and information
contained in this news release. Actual results could differ
materially from those currently anticipated due to a number of
factors and risks including various risk factors discussed in the
Company’s disclosure documents which can be found under the
Company’s profile on https://www.sedarplus.com. These
statements speak only as of the date of this news release. The
Company assumes no obligation to update the forward-looking
statements of beliefs, opinions, projections, or other factors,
should they change, except as required by law.
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