Medicinal Cannabis Company Based in Colombia
VANCOUVER, Nov. 1, 2018 /CNW/ - Organto Foods Inc. (TSX-V: OGO, OTC: OGOFF) ('Organto" or the "Company"), an integrated provider of value-added organic vegetables and fruits today announces that it has entered into an agreement to acquire Medicannabis S.A.S. ("Medicannabis"), a privately held Colombian medicinal cannabis company that is a late stage applicant for licenses to enable it to cultivate and process cannabis in Colombia.
"We believe the acquisition of Medicannabis is a logical and complementary extension to our current organic vegetables and fruits business, given our diverse sourcing, processing, logistics, import, export and organic certification expertise." commented Steve Bromley, Chair and Interim Chief Executive Officer of Organto Foods Inc. "While organic fruits and vegetables will continue to be the mainstay of our business, we believe the addition of a self-standing cannabis division will ultimately lead to increased profitability and value creation for our shareholders."
Under the terms of the agreement, the transaction would proceed in two stages. In the first stage Organto acquires the shares of Medicannabis and undertakes the final stages of the licensing process. Subject to final due-diligence, this is anticipated to be completed during the week of November 5, 2018. In the second stage, which remains subject to the acceptance of the TSX Venture Exchange and shareholder approval, Organto issues up to 8,000,000 shares (the "Shares") to the original shareholders of Medicannabis upon receipt of a cultivation license which is one of a number of licenses Medicannabis has applied for. Should the transaction proceed, Organto will seek shareholder approval via shareholder consent resolutions, and is confident this can be obtained in a timely manner. The Shares would be subject to a four month hold period under applicable securities regulation and also be subject to contractual release limitations over a three-year period.
Full details of the acquisition, including Organto's plans in the cannabis sector, Medicannabis' unique cultivar breeds, and key personnel appointments, will be announced following closing, should it proceed, and is currently scheduled for the week of November 5, 2018.
The Company intends to pay a finder's fee in connection with the acquisition of Medicannabis and the issuance of the Shares in accordance with the policies of the TSX Venture Exchange.
ON BEHALF OF THE BOARD
Chair and Interim Chief Executive Officer
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 news release.
Organto is an integrated provider of year-round value-added branded organic vegetables and seasonal organic and non-GMO fruit and vegetable products serving a growing socially responsible and health conscious consumer around the globe. Organto employs a business model that is integrated from the "table to the field". Driven by consumer demand for healthy and organic food products, it operates an integrated business model with sourcing, logistical and processing capabilities, providing complete traceability from the table back to the field. Operations are currently located in Guatemala, The Netherlands and the USA, as well as third-party supply from a variety of regions, with plans to continue to expand supply capabilities via strategic third-party growers and processors in other growing regions. Organto's business model is rooted in its commitment to sustainable business practices focused on environmental responsibility and a commitment to the communities where it operates, its people and its shareholders.
FORWARD LOOKING STATEMENTS
This news release may include certain forward-looking information and statements, as defined by law including without limitation Canadian securities laws and the "safe harbor" provisions of the US Private Securities Litigation Reform Act of 1995 ("forward-looking statements"). In particular, and without limitation, this news release contains forward-looking statements respecting Organto's current business model and related expertise; Organto's belief that the acquisition of Medicannabis is a logical and complementary extension to Organto's business; Organto's belief that the addition of a self-standing cannabis division will lead to increased profitability and value creation for shareholders; Organto's belief that shareholder approval via a shareholder consent resolution will be received in a timely manner; the timing of the planned closing of the acquisition of Medicannabis; management's beliefs, assumptions and expectations; and general business and economic conditions. Forward-looking statements are based on a number of assumptions that may prove to be incorrect, including without limitation assumptions about the following: the continued growth in global demand for cannabis products; the ability and time frame within which Organto's foods business model will be implemented and product supply will be increased; cost increases; dependence on food suppliers, partners and contractual counter-parties; changes in the business or prospects of Organto; unforeseen circumstances; risks associated with the organic produce business generally, including inclement weather, unfavorable growing conditions, low crop yields, variations in crop quality, spoilage, import and export laws and similar risks; transportation costs and risks; general business and economic conditions; and ongoing relations with distributors, customers, employees, suppliers, consultants, contractors, partners and joint venturers. The foregoing list is not exhaustive and Organto undertakes no obligation to update any of the foregoing except as required by law.
SOURCE Organto Foods Inc.
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