/NOT FOR DISTRIBUTION IN THE UNITED STATES/
- LGC Capital to acquire 47% of Italian Cannabis Light
Company, EasyJoint Project SRL.
- EasyJoint has an estimated 85% market share of Italy's Cannabis Light market.
- EasyJoint currently sells through over 450 retail outlets in
Italy and 11 branded
stores.
- EasyJoint had over C$6 million
in sales in the 10-months to October 31,
2018.
- EasyJoint's products consist of over 150 branded items
ranging from dry cannabis flowers to CBD oils and edibles.
- LGC anticipates applying for listing on the U.S. OTCQB in
the near future.
MONTREAL, Nov. 12, 2018 /CNW Telbec/ - LGC Capital
Ltd. (TSXV: LG) and (OTC-PINK: LGGCF) ("LGC") is pleased to
announce that is has entered into a formal definitive agreement to
acquire 47% of EasyJoint Project SRL ("EasyJoint"), an Italian
company, for a total cash and share consideration of €4.788 million
(C$7.153 million at today's exchange
rate of 1 EUR = 1.494 CAD). Definitive documentation will now be
submitted to the TSX Venture Exchange (the "TSXV") and closing of
this transaction is subject only to TSXV review and approval.
EasyJoint's Market Presence in Italy
EasyJoint (https://www.easyjoint.it/) is widely recognized as
the market leader in Italy, having
been extensively written up in the media, including this
New York Times article:
https://www.nytimes.com/2018/04/21/world/europe/italy-cannabis-flowers.html
EasyJoint's Store in Milan,
Italy
EasyJoint currently controls approximately 85% of the
distribution of legal "cannabis light" retail products in
Italy and has established itself
as the leading brand in Italy.
EasyJoint products are distributed in over 450 retail points of
sale in Italy and rapidly
expanding beyond current specialty stores to EasyJoint branded
franchise stores. Eleven EasyJoint franchise stores have already
opened in Rome, Milan, Piacenza, Rovato (BS), Viadana,
Bassano del Grappa, Crotone,
Pantelleria, and Parma with an additional two stores under
discussion.
EasyJoint's distribution in Italy is extensive.
EasyJoint has also been successful at penetrating the very large
licensed tobacco network in Italy. EasyJoint products consist
of over 150 branded items ranging from high-CBD dry cannabis
flowers to CBD oils and edibles. Through LGC's network of
strategic investments, EasyJoint will expand its brand presence
into new global markets, including legal cannabis markets across
Europe, North America, and the Caribbean.
For the 10 months prior to October 31,
2018, unaudited revenues have grown to over €4 million
(C$6 million) with margins of 19.7%,
which will increase as EasyJoint achieves economies of scale
through expansion. EasyJoint's revenue channels split
approximately 75% through retail with the remaining 25% of revenues
through e-commerce.
Mr. Luca Marola, Co-founder
and CEO of EasyJoint
EasyJoint is led by its Co-founder and CEO, Mr. Luca Marola, who has been an early advocate of
the Italian anti-prohibitionist movement in favor of the
legalization and normalization of the use of cannabis in
Italy. Mr. Marola has actively participated in cannabis
related discussions in the Italian and European Parliaments and has
made multiple interventions at the Italian Parliament, which have
impacted the laws that passed in recent years. Mr. Marola is
the founder of one of the oldest Italian grow shops, "Canapaio
Ducale", founded in Parma in 2002, he is the host of the only
Italian radio show focused on cannabis and has published 4 books on
cannabis and its legalization.
Legal Status of Cannabis in Italy
In January 2017, the Italian
government passed a law (242/2016) which regulates the cultivation,
transformation and sale of Cannabis and Cannabis derived
products. Under this new legal framework, it is legal to
produce and market Cannabis and related products, which contains a
percentage of THC less than 0.2%.
EasyJoint is fully vertically integrated from seed to consumers
in Italy. EasyJoint buys its
cannabis input product from a large exclusive contracted
independent farmer's network across Italy, to whom EasyJoint sells female
seedlings that meet their strict premium specifications, thus
eliminating the risk of growing male plants. In addition,
EasyJoint has established the first Italian hemp pasta for the
consumer market under the brand EasyJoint. It will be
officially launch in Montreal
before the end of 2018.
John McMullen, Chief Executive
Officer of LGC Capital, stated: "With approximately 85% of
the cannabis light distribution in Italy and healthy revenue generation,
EasyJoint is a significant investment opportunity for LGC.
We see Italy, with a population of
60 million, as one of the key European market for cannabis growth
and a springboard into other parts of the EU over time. This deal
represents LGC's third investment in Europe in 2018 and allows us to work closely
with other LGC investee companies to grow and sell legal cannabis
products to EasyJoint for their distribution."
Luca Marola, founder of
EasyJoint stated: "Over the past 18 months,
EasyJoint has pioneered the cannabis light market in Italy and by driving public opinion has
created a new approach to cannabis. Today, we are proud to
announce LGC Capital's investment into our company. Thanks to
LGC's expertise and resources in successfully addressing the global
market, EasyJoint is ready to further strengthen our leadership
position and develop our growth in new markets."
Transaction details
Payment for the 47% equity in Easy Joint SRL will be effected by
way of i) a cash payment in the amount of €2,565,000 (C$3,832,110) and ii) a payment in common shares
for a value of €2,223,000 (C$3,321,162) in the share capital of LGC (the
"Payment Shares") at a price per share set at 85% of the five (5)
day volume weighted average price of LGC shares immediately prior
to the closing of the transaction (26,152,941 shares at current
prices). In accordance with Canadian regulatory requirements, the
Payment Shares will be subject to a four (4) month hold period
calculated as of the Closing Date. For this transaction, a finder's
fee of 2.5% cash and 2.5% in shares will be paid to an arm's length
party. This transaction is subject to normal closing
conditions and review and approval by TSXV.
Information Relating to EasyJoint Project SRL
All information contained in this press release relating to
EasyJoint Project SRL has been provided to LGC by EasyJoint Project
SRL. LGC has relied upon this information without having made
independent inquiries as to its accuracy or completeness and
assumes no responsibility for any inaccuracy or incompleteness of
such information.
About LGC Capital Ltd (www.lgc-capital.com)
LGC Capital is a leading cannabis investment firm with a focus
on the Legal Global Cannabis market. Through its growing
portfolio investment companies, LGC is building a world-leading,
vertically integrated system of interconnected legal cannabis
companies with cultivation, processing and distribution in
Australia, Jamaica, Switzerland, Italy, and Canada serving domestic and export markets.
LGC Capital Ltd. is a Canadian incorporated public company listed
on the TSX Venture Exchange (TSXV: LG).
Through its partners and assuming pending transactions under
review by the TSXV are approved, LGC currently will have over
450,000 square feet of planted cannabis in Jamaica, Switzerland, Italy, and Australia, with that number expected to
increase to over 2,100,000 square feet by 2021, as its portfolio
companies execute their expansion plans, in addition to the
anticipated licensing of Tricho-Med's operations in Quebec, Canada.
LGC partners currently sell cannabis products in over 1,000
points of sale across Switzerland
and Italy under the ONE Premium
Cannabis and EasyJoint brands as well as medical cannabis oils in
Australia under the Little Green
Pharma brand. LGC's partner's branded products are available
in a variety of product formats including dry cannabis flower,
tinctures, oils, seeds, and beverages.
Notice Regarding Forward Looking Statements
This press release may contain forward-looking statements with
respect to LGC Capital Ltd. ("LGC") and their respective
operations, strategy, investments, financial performance and
condition. These statements can generally be identified by use of
forward- looking words such as "may", "will", "expect", "estimate",
"anticipate", "intends", "believe" or "continue" or the negative
thereof or similar variations. The actual results and performance
of LGC and Easy Joint Project SRL ("EasyJoint") could differ
materially from those expressed or implied by such statements. Such
statements are qualified in their entirety by the inherent risks
and uncertainties surrounding future expectations. Some important
factors that could cause actual results to differ materially from
expectations include, among other things, general economic and
market factors, competition, government regulation and the factors
described under "Risk Factors and Risk Management" in LGC's
Management's Discussion and Analysis for the three and nine months
ended June 30, 2018, as filed on
SEDAR (www.sedar.com). The cautionary statements qualify all
forward-looking statements attributable to LGC and persons acting
on its behalf. Unless otherwise stated, all forward-looking
statements speak only as of the date of this press release and
neither LGC nor EasyJoint has any obligation to update such
statements, except to the extent required by applicable securities
laws. Neither the TSX Venture Exchange nor its Regulation
Service Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Caution Regarding Press Releases
Neither the TSX Venture Exchange nor its Regulation Service
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE LGC Capital Ltd