Cannabis Wheaton to acquire MMJ PhytoTech backed Dosecann for $38M

Cannabis Wheaton Income Corp. (TSX-V: CBW) has entered into a definitive agreement to acquire all of the outstanding securities of Dosecann Inc., a late-stage “Licensed Dealer” applicant, for $38,000,000, payable in common shares of Cannabis Wheaton.

Dosecann Inc. has previously completed a private round of secured convertible debenture unit financing led by MMJ PhytoTech Limited (ASX: MMJ). MMJ PhytoTech invested $2.5 million in Dosecann at pre-money valuation of $11.5 million.

All outstanding convertible securities of Dosecann will either be converted into Dosecann common shares and exchanged for consideration shares on the closing of the acquisition, or will otherwise be exchanged for convertible securities of Cannabis Wheaton based on the exchange ratio used in the acquisition.

The transaction is expected to close on or about April 30, 2018.

CreekStoney, Ontario based Dosecann is developing a suite of cannabis-based health and wellness products for the current medical and future adult use cannabis market. The company is planning construction of a 45,000ft² GMP pharmaceutical level production facility in PEI and aiming to secure Licensed Dealer status by May 2018.

photo credit: Shane Rounce via Unsplash

News Release

CANNABIS WHEATON ANNOUNCES DEFINITIVE ACQUSITION AGREEMENT WITH DOSECANN

Vancouver, British Columbia, April 4, 2018 – Cannabis Wheaton Income Corp. (TSX.V – CBW) (“Cannabis Wheaton” or the “Company”) announces that it has entered into a definitive acquisition agreement (the “Acquisition Agreement”) to acquire all of the outstanding securities of Dosecann Inc. (“Dosecann”). Dosecann is a late-stage “Licensed Dealer” applicant pursuant to the Narcotic Control Regulations with a purpose-built 42,000 square foot facility located in Charlottetown, Prince Edward Island.

Pursuant to the Acquisition Agreement, Cannabis Wheaton will acquire all of the outstanding securities of Dosecann (the “Dosecann Securities”) by way of a “three-cornered amalgamation” (the “Acquisition”). Upon the completion of the Acquisition, Dosecann will become a wholly-owned subsidiary of Cannabis Wheaton.

As consideration for the Dosecann Securities, the Company will pay the holders of the Dosecann Securities an aggregate of up to $38,000,000, payable in common shares of Cannabis Wheaton (the “Consideration Shares”), subject to the satisfaction of certain post-closing time and performance-based milestones. As part of the Acquisition, all outstanding convertible securities of Dosecann will either be converted into Dosecann common shares and exchanged for Consideration Shares on the closing of the Acquisition (the “Closing”), or will otherwise be exchanged for convertible securities of Cannabis Wheaton based on the exchange ratio used in the Acquisition.

The Dosecann principals, who collectively hold approximately 66.96% of the outstanding common shares of Dosecann, have agreed to enter into lock-up agreements in favour of Cannabis Wheaton restricting their ability to transfer their Consideration Shares (the “Locked-up Securities”) until the date that is 18 months following the Closing, provided that: (i) one-half of the Locked-Up Securities shall cease to be subject to the lock-up on the date that is 6 months following the Closing; and (ii) the remaining Locked-Up Securities shall cease to be subject to the lock-up in equal tranches on the 12th and 18th month anniversaries of the Closing.

The Acquisition is subject to a number of conditions, including the receipt of all required shareholder and regulatory approvals and the satisfaction or waiver of all conditions of closing under the Acquisition Agreement. The Transaction is expected to close on or about April 30, 2018.

ON BEHALF OF THE BOARD
“Chuck Rifici” Chairman & CEO

About Cannabis Wheaton (TSX.V: CBW)

Cannabis Wheaton is a collective of entrepreneurs with a passion for the cannabis industry past, present and future. Our mandate is to facilitate growth for our partners by providing them with financial support and sharing our collective industry experience. Our partners all have different visions, voices and brandvalues, and all share a common goal—to build a world-class industry based on ethics, diversity, quality and innovation.

About Dosecann

Dosecann Inc. is a PEI-based Licensed Dealer applicant currently completing the buildout of a 42,000 square foot GMP compliant facility. Within the purpose-built facility, Dosecann intends to accommodate product development, extraction, formulation, filling and packaging. Dosecann is developing a suite of cannabis products across a variety of delivery methods for both the medical and adult use markets.

Investor Relations:

For more information about investing in Cannabis Wheaton, please visit: http://www.wheatonincome.com or contact our Investor Relations Team:
Email: IR@wheatonincome.com
1-833-695-2414
Stay Connected:
Follow up on Twitter @WheatonIncome

Media Enquiries (only):
For media enquiries or to set up an interview please contact:
Sarah Bain, VP External Affairs
Email: sarah@cannabiswheaton.com
Phone: 613.230.5869


Ted Liu
Ted Liu, M.Sc. (Mining), MBA (Finance), is the Editor of Private Capital Journal, TechnologyMetals.ca, GoldSilverMetals.ca, and former Editor of Canadian Private Equity. Ted has been passionately tracking Canadian private capital industry since 1992, most recently served as Research Director for The Canadian Venture Capital and Private Equity Association (CVCA). Ted was the architect of CVCA infobase, and is the architect of sophisticated and advanced CPE Media Private Capital Dealbase. Ted is President of CPE Media Inc., Canada's independent, trusted and unbiased data provider tracking Canadian VC/PE, private capital industry and public market.
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