Aphria launches US expansion strategy
Aphria will invest $25 million into DFMMJ Investment Ltd., a new special purpose private company which will acquire all or substantially all of the assets of Chestnut Hill Tree Farm and subsequently amalgamate into a subsidiary of SecureCom Mobile, a public company listed on the Canadian Securities Exchange, as part of a business combination. The funds, when combined with an additional $35 million to be raised in a brokered private placement led by Clarus Securities Inc. will allow Liberty, on completion of the Business Combination, to indirectly hold and operate the assets of Chestnut. Chestnut is a licensed holder in the state as an authorized dispensing organization of low-THC medical cannabis to patients in need in the State of Florida.
As part of the transaction, Aphria has agreed, upon completion of the Business Combination, to licence its Aphria medical brand to Liberty, in exchange for a perpetual 3% royalty on all sales of marijuana and related products. Further, Aphria has agreed, upon completion of the Business Combination, to licence its greenhouse growing intellectual property system to Liberty in exchange for additional common shares in Liberty. As part of the investment in Liberty and Business Combination, Aphria will be entitled, among other customary rights, to appoint two nominees as board members to Liberty’s proposed five-person board. It is the intention of the company to appoint Vic Neufeld and John Cervini as nominees to Liberty’s board of directors; it is also expected that they will be joined by Aaron Serruya of Serruya Private Equity, effective upon the completion of the Business Combination. Once the transaction is completed, Aphria will own approximately 37.6% of the issued and outstanding common shares of Liberty.
Aphria received transactional advisory services from the Delavaco Group, who arranged the acquisition of Chestnut and who is participating as a significant shareholder in Liberty.
“Aphria’s success story is no longer limited to Canada”, said Vic Neufeld, Chief Executive Officer. “Aphria’s footprint expansion provides significant growth opportunities for our shareholders. The royalty agreement provides an additional cash flow stream to our industry leading cash flow from operations. The additional equity received for our intellectual property continues the validation of our greenhouse model. We will continue to examine other US opportunities and strive to introduce new states to Liberty’s business model.”
For more information:
Aphria Inc.
Vic Neufeld
President & CEO
1-844-427-4742
aphria.com