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Company Continues its Efforts to Re-Enter Cannabis Space
IRVINE, Calif., Jan. 8, 2019 /PRNewswire/ — Cannapharmarx, Inc. (OTC Pink Sheets: “CPMD”) announced today it has completed the acquisition of Alternative Medical Solutions, Inc., (“AMS”), an Ontario, Canada corporation. Under the terms of the agreement Hanover CPMD Acquisition Corp. (“HCAC”), a wholly-owned subsidiary of the Company, acquired all of the issued and outstanding securities of AMS for total consideration of CAD$12,710,000 consisting of cash, common stock, and a promissory note.
AMS is a late stage marijuana licensed producer applicant in Canada currently operating in the Pre-License Inspection and Licensing phase, which is Stage 5 of 6, with a fully approved license. Upon final construction of the AMS cultivation facility, Health Canada will inspect the facility and relevant operating procedures to ensure it meets the standards which have been approved in the application. Upon completion of the licensing stage, AMS should receive approval from Health Canada to begin cultivation of marijuana.
The purpose-built AMS property, acquired by the Company in this acquisition, includes 48,750 square feet of cultivation infrastructure contained within 6.7 acres of land in Hanover, Ontario Canada.
The facility’s exterior is complete. However, construction of the modern interior has not yet commenced. The finished production facility will include twenty individual state of the art grow rooms that are expected to maintain an annual production capacity of 9,500 kilos of marijuana. Completion of the build out of the facility is expected to take an estimated 20 weeks. Together with the remaining equipment needed to complete this expansion management estimates the Company will require approximately CAD$12.2 million in additional financing. The Company currently does not have a firm commitment for this financing but is optimistic that it will be able to raise these funds.
The completed acquisition of AMS affords Cannapharmarx, Inc. a licensed producer platform to enter the robust on-trend global marijuana segment. In October 2018, Canada became the first G7 nation to legalize the recreational use of marijuana. The Company anticipates proactively seeking additional business opportunities with other companies operating in the legal cannabis sector in Canada and such other jurisdictions where the same has been deemed legal.