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Minimum quantity of 1,000 Kgs per month to ramp up to 3,000 Kgs per month
OTTAWA, Oct. 30, 2018 /CNW Telbec/ - LiveWell Canada Inc. ("LiveWell" or the "Company"), (TSXV: LVWL) (OTC: LXLLF), is pleased to announce that it has partnered with Vitality CBD Natural Health Products Inc, a Canadian CBD company, (collectively the "Suppliers") to sign a binding term sheet ("Term Sheet") with Global Wellness Distributors, LLC ("Global Wellness"), a Nevada entity controlled by a U.S. private equity firm, for the supply of cannabidiol (CBD) wholesale products in North America.
Under the Term Sheet dated October 27, 2018, which covers a period of 15 months with an option for four renewable one-year terms, Global Wellness commits to distribute CBD isolate, distillate and full spectrum CBD oil. At closing, Global Wellness will pay a US$3 million deposit to the Suppliers for the initial CBD supply. Commencing in January 2019, Global Wellness will distribute a minimum quantity of 1,000 kilograms per month. Starting April 2019 to March 2020, the minimum quantity increases to 3,000 kilograms per month, for a total minimum quantity of 39,000 kilograms over the 15-month contract period.
LiveWell and Global Wellness will work together to market and sell CBD products in North America, leveraging sales expertise and operational support in both organizations. The parties will co-share net profits on all sales. Based on current observable wholesale market pricing, CBD isolate pricing ranges between US$6,500 to US$10,000 based on the quality and purchase volume of the CBD purchase order.
All CBD products being supplied under the Term Sheet will be derived from industrial hemp and contain no more than 0.3% THC content, making it suitable for the health and wellness market. As legalization and acceptance of CBD -- the non-psychoactive cannabis compound -- accelerates at a rapid pace globally, the demand for CBD products to improve health and wellness is exploding. LiveWell has conducted major research on CBD and is investing in technologies for the extraction and isolation of CBD and other cannabinoids for use in prescription and consumer health products.
"For some time now LiveWell has been quietly positioning itself to become a significant supplier of wholesale CBD to global companies looking to launch a multitude of CBD products. We recognized early on that if these companies were to enter the marketplace, a large scale, reliable source of CBD would be required, and we have assembled the assets and partnerships to provide it," said David Rendimonti, President and CEO of LiveWell. "This is one of several partnerships we have developed that allows LiveWell to generate significant revenues at a nominal cost and no outlay of capital."
The Term Sheet is subject to customary due diligence and execution of a definitive agreement by November 30, 2018.
CBD is the same molecule whether it comes from cannabis or hemp. However, CBD derived from hemp is more economical to produce and has a larger global market potential due to less stringent regulations worldwide for hemp. The Brightfield Group of Chicago estimates the North American market for CBD from hemp could reach US$22 billion by 2022. However, the global market could be significantly larger. Several European countries have already legalized hemp, and the World Health Organization has also recommended that CBD be descheduled across 194 nations.
About Global Wellness Distributors, LLC
Headquartered in Las Vegas, Nevada, Global Wellness Distributors, LLC ("Global Wellness") is a new large-scale distributor of compliant hemp products, including CBD Isolate, CBD Distillate and full spectrum hemp-derived oil. The Global Wellness team consists of accomplished industry veterans whose substantial experience in the cannabis and hemp markets throughout the United States and Canada, including California, Colorado, Kentucky, and Oregon, is focused on aggregating large-scale hemp supply for distribution to identified scale buyers.
The Global Wellness team maintains strategic partnerships with domestic and international industry leaders to provide the most competitive and affordable supply solutions available to help ensure success for companies in the industrial hemp and CBD marketplace. Global Wellness' management team brings decades of industry experience to the forefront of the ever-growing global hemp economy and are differentiated in the marketplace by their process-driven operating principals and high degree of professionalism.
About LiveWell Canada
LiveWell Canada Inc. (TSXV:LVWL, OTC: LXLLF) is an innovative cannabis and hemp company focused on advanced research on CBD and other cannabinoids, as well as developing and distributing prescription and consumer health and wellness products. The company has greenhouses under construction located in Ontario and Québec and is supported by business partners such as Canopy Growth (TSX: WEED, NYSE: CGC) and Canopy Rivers (TSXV: RIV). For more information, visit livewellcorp.com.
Vitality CBD Natural Health Products Inc. ("Vitality") is a privately-owned Canadian company. Through its wholly-owned subsidiary, it is a fully integrated, hemp processing and CBD isolation and wholesaling company. Vitality has just harvested over 21,000 acres of industrial hemp, purposely planted for CBD production. It has operations in Eureka, Montana under the State Farm Act with licenses to cultivate, process and market CBD in the United States. Vitality is currently producing CBD isolate in its Eureka facility in its commercial demonstration plant and is building full-scale manufacturing facilities that will increase production to over 3,000 kilograms per day of CBD isolate.
Cautionary Note Regarding Forward-Looking Statements
This release includes forward-looking statements about the Company and its business. Often, but not always, forward-looking statements can be identified by the use of words such as "plan", "continue", "expect", "schedule", "project", "intend", "believe", "anticipate", "estimate", "may", "will", "potential", "proposed" and other similar words, or statements (including negative variations) that certain events or conditions "may" or "will" occur. Such statements are based on the current expectations of management. The forward-looking events and circumstances discussed in this release may not occur by certain specified dates or at all and could differ materially as a result of unknown and known risk factors and uncertainties affecting the Company. Further, the Company cautions that this foregoing list of material factors is not exhaustive, and readers are encouraged to read all Risk Factors disclosed in the Company's Management Discussion & Analysis dated October 26, 2018.
In respect of the forward-looking statements and information concerning the anticipated benefits and completion of the Term Sheet, including the anticipated timing for completing the definitive agreement, the Company has provided such statements and information in reliance on certain assumptions that it believes are reasonable at this time. Further, there can be no assurance that the transaction contemplated under the Term Sheet will occur, or that it will occur on the terms and conditions contemplated in this news release. Following the due diligence, the Transaction could be modified, restructured or terminated.
The forward-looking information contained in this press release represents expectations of the Company as of the date of this press release and accordingly, is subject to change after such date. Readers should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While the Company may elect to, it does not undertake to update this information at any particular time except as required in accordance with applicable securities laws.
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.
For more information, visit livewellcorp.com.
SOURCE LiveWell Canada Inc.
For further information: Media: English, Deborah Stokes, 819-576-3789, firstname.lastname@example.org; French, Sonya Lord, 866-308-1518, email@example.com; Investors: Nicole Marchand, 416-428-3533, firstname.lastname@example.org; Company: David Rendimonti, President and CEO; Steven Archambault, Chief Financial Officer