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OTTAWA, ONTARIO--(Marketwired - Mar 18, 2016) - GrowPros Cannabis Ventures Inc. ("GrowPros" or the "Company") (CSE:GCI) is pleased to announce the signing of a definitive agreement (the "Agreement") with Delta 9 Bio-Tech Inc. ("Delta 9"), a "Licensed Producer" under Canada's Marijuana for Medical Purposes Regulation ("MMPR") on multiple collaborative ventures.
Under the terms of the Agreement, Delta 9 will submit to Health Canada an application for Amendment under Section 29 of the MMPR to collaborate with GrowPros on the previously submitted application. (see previous news releases)
In consideration for this collaboration, GrowPros will make milestone payments to Delta 9 in cash or shares (the "Shares") with an aggregate value of $2,000,000. The value of the Shares will be based on the greater of (i) the closing market price of GrowPros common shares on the day immediately prior to the day of issuance and (ii) $0.05 per Share. Under the terms of the agreement, the first milestone payment of $400,000 will be issued in Shares at a value of $0.05 (the closing price on the date of the signing of the previously released collaborative venture terms agreement). Delta 9 will have the option to receive the remaining 4 milestone payments in cash or Shares, with all cash payments made payable to Delta 9 upon completion of the final milestone. GrowPros will announce the completion and terms of each milestone payment as required by regulations. Achieving the final milestone will occur upon the full licensing of the GrowPros facility located in Low Quebec. All milestones payments will be held by our Escrow Agent and will be released upon the completion of the next milestone.
GrowPros will be required to finance the design, development, construction, and all out-of-pocket costs relating to the licensing of the Quebec Facility. GrowPros intends to raise additional capital through both secured debit and private placements to finance the construction. The estimated cost of construction is projected at approximately $3 million dollars.
The Agreement also provides that GrowPros and Delta 9 will enter into a secondary agreement in which GrowPros will provide Delta 9 with production consultation on there Manitoba based facility as well as patient acquisition services focused primarily in Quebec.
In addition, GrowPros will grant Delta 9 a right of first refusal to purchase all dried marijuana product produced at the Quebec Facility for a period of 2 years from the date of acquisition of the production license.
"Over the past year, we have worked closely with Delta 9 to establish a strong and mutually beneficial business relationship", says Ryan Brown, CEO of GrowPros. "This Agreement is the culmination of that hard work and sets the foundation for GrowPros and Delta 9 to continue collaborating on a variety of business opportunities."
"We are very pleased to be working with GrowPros to expand our operations into Quebec and Eastern Canada", confirms John Arbuthnot, Vice President of Delta 9. "With a wealth of experience and resources, GrowPros is a great strategic partner for us. We see a bright future for both our companies," Mr. Arbuthnot explains.
The Canadian Securities Exchange (CSE) has not reviewed this news release and does not accept responsibility for its adequacy or accuracy.
Some statements in this release may contain forward-looking information. All statements, other than of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future (including, without limitation, statements regarding potential acquisitions and financings) are forward-looking statements. Forward-looking statements are generally identifiable by use of the words "may", "will", "should", "continue", "expect", "anticipate", "estimate", "believe", "intend", "plan" or "project" or the negative of these words or other variations on these words or comparable terminology. Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond the Company's ability to control or predict, that may cause the actual results of the Company to differ materially from those discussed in the forward-looking statements. Factors that could cause actual results or events to differ materially from current expectations include, among other things, without limitation, the inability of the Company, through its wholly-owned subsidiary, GrowPros MMP Inc., to obtain a licence for the production of medical marijuana; failure to obtain sufficient financing to execute the Company's business plan; competition; regulation and anticipated and unanticipated costs and delays, and other risks disclosed in the Company's public disclosure record on file with the relevant securities regulatory authorities. Although the Company has attempted to identify important factors that could cause actual results or events to differ materially from those described in forward-looking statements, there may be other factors that cause results or events not to be as anticipated, estimated or intended. Readers should not place undue reliance on forward-looking statements. The forward-looking statements included in this news release are made as of the date of this news release and the Company does not undertake an obligation to publicly update such forward-looking statements to reflect new information, subsequent events or otherwise unless required by applicable securities legislation.
GrowPros Cannabis Ventures Inc.
Chief Executive Officer