Clean Commodities Corp. Announces Intent to Spin-Out Licensed Hemp Producer to Shareholders
Sep 23, 2019, 15:30 ET
--- SpinCo. Pursuing CBD Focused Business ---
VANCOUVER, Sept. 23, 2019 /CNW/ - Clean Commodities Corp. (TSX VENTURE: CLE) ("Clean Commodities" or the "Corporation") is pleased to announce that it intends to spin-out its wholly-owned subsidiary, Western Hemp Corp. ("Western Hemp" or "WHC" or "SpinCo"), to the Corporation's shareholders. Western Hemp is a licensed hemp producer under the Cannabis Act (Canada) and is pursuing a high-margin CBD-focused business model. In conjunction with the spin-out, SpinCo intends to seek a listing on the Canadian Securities Exchange.
"For many quarters, our cash treasury has remained strong and in excess of our ongoing capital needs. Our decision to allocate a portion of our resources to deliver a licensed producer to our shareholders is an exciting development. Western Hemp Corp. represents an exceptional opportunity for shareholders to benefit from the development of a tier-one hemp/CBD platform leveraging multiple crop locations at climate-optimized properties within Western Canada," stated Ryan Kalt, CEO of Clean Commodities.
About Western Hemp Corp. ("Western Hemp" or "WHC" or "SpinCo")
Western Hemp holds an Industrial Hemp License (the "IHL") issued in accordance with the Cannabis Act (Canada).
The IHL held by WHC is in good standing through August 2021 and is renewable thereafter.
Western Hemp has a near-term focus on its hemp production facilities located in British Columbia's "Green Triangle", with a longer-term view of vertical integration and expansion in the broader cannabidiol market. The company is incorporated under the laws of British Columbia and has a head-office in Vancouver, British Columbia.
Western Hemp is currently positioned to deliver approximately one-quarter of a million pounds of dried-flower in 2020 through its control of 300+ acres of cultivation capacity across 3 facilities, as follows:
Lillooet, British Columbia – Hemp Farm (Production)(the "Lillooet Farm")
The Lillooet Farm is a 150 acre industrial farm held on a leased-basis. Western Hemp is targeting 2020 production at the Lillooet Farm of 120,000 pounds of dried flower with a strain concentration of 5% CBD (+/- 1%).
Lillooet is a community located on the Fraser River in British Columbia about 240 km up the British Columbia Railway line from Vancouver. The location provides a premier plant growing environment offering a long growing season within a dry climate situated in what is often Canada's hottest summer location on a daily basis.
Kamloops, British Columbia – Hemp Farm (Production)(the "Kamloops Farm")
The Kamloops Farm is a 75 acre industrial farm held on a leased-basis. Western Hemp is targeting 2020 production at the Kamloops Farm of 60,000 pounds of dried flower with a strain concentration of 5% CBD (+/- 1%).
Kamloops is a city in south-central British Columbia at the confluence of the two branches of the Thompson River and east of Kamloops Lake. The Thompson Valley, in which Kamloops sits, has dry and sunny weather with daytime humidity below 40% during summers therein offering a robust plant growing environment.
Walhachin, British Columbia – Hemp Farm (Production)(the "Walhachin Farm")
The Walhachin Farm is a 75 acre industrial farm held on a leased-basis. Western Hemp is targeting 2020 production at the Walhachin Farm of 60,000 pounds of dried flower with a strain concentration of 5% CBD (+/- 1%).
Walhachin is a rural community located in British Columbia and is situated in between Kamloops and Lillooett alongside the Thompson River and on route of Canada's TransCanada Highway. The hot, dry climate combined with irrigation water from the Thompson River enables high-yield plant cultivation.
The Corporation also advises that Western Hemp is reviewing higher-CBD yielding strains but the commercial availability of such strains for the forthcoming calendar year will be dependent upon their status as an approved cultivar for 2020 by Health Canada.
Western Hemp intends to evaluate further growth opportunities once publicly listed.
WHC Appointment of VP, Operations
The Corporation also announces that it intends to appoint Mr. Will Ciancone as VP, Operations for Western Hemp subsequent to its spin out to the Corporation's shareholders. Mr. Ciancone previously served as the VP, Operations for Pacific North Hemp Inc. and has numerous years of experience in the cultivation and harvesting of industrial hemp.
It is expected that the current CEO and CFO of the Corporation will assume the same titles of Western Hemp, and that current directors of the Corporation will assume the same positions at Western Hemp.
It is anticipated that in conjunction with the spin-out, Western Hemp will seek to obtain a public listing during the fourth quarter of 2019 on the Canadian Securities Exchange.
As at June 30, 2019, the Corporation had 102,648,746 common shares outstanding. It is expected that each common shareholder of the Corporation will receive a full or pro-rata common share of Western Hemp. Current shareholders of the Corporation are expected to hold 100% of the resulting issuer, exclusive of any SpinCo specific dilution associated with any growth-related capital financings that may coincide with an exchange listing.
The Corporation intends to pre-fund Western Hemp in advance of its public listing. As at June 30, 2019, the Corporation had cash on-hand of $1,687,529, as compared to cash-on hand of $1,609,346 as at June 30, 2018.
Additional information on the terms of the spin-out of Western Hemp will be forthcoming to shareholders in due course.
Clean Commodities acquired the IHL through the closed acquisition of Western Hemp on September 12, 2019 in exchange for nominal cash consideration to an arm's-length party.
The Corporation itself intends to remain listed as a mining issuer on a Canadian-based exchange in accordance with its normal-course, ongoing and principal mineral exploration business.
About Clean Commodities Corp.
Clean Commodities Corp. (TSXV:CLE) is a mining exploration company involved in a diverse portfolio of clean commodity assets including uranium and lithium projects. For more information, please visit www.cleancommodities.com.
Ryan Kalt, Chief Executive Officer
This news release contains forward-looking statements. Forward-looking statements address future events and conditions and therefore, involve inherent risks and uncertainties. Actual results may differ materially from those currently expected or forecast in such statements.
Neither the TSX Venture Exchange nor its Regulation Services 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 Clean Commodities Corp.
For further information: Ryan Kalt, Chief Executive Officer, 604-652-1710, [email protected], www.cleancommodities.com
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