Medicine Man Technologies, Inc. announces launch of direct operator division of licensed cannabis operations

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DENVER, Jan. 17, 2019 /PRNewswire/ — Today Medicine Man Technologies (OTCQX: MDCL), a leading consulting, intellectual property licensing and products company in the cannabis industry, has announced a binding agreement that is expected to lead to the near-term acquisition of the Colorado licensee, Medicine Man Denver (MMD). MMD is one of the pioneering operators that helped establish the burgeoning cannabis industry over the past decade, with brand recognition far beyond its immediate market. Its operations include one of the largest indoor cultivations in the state of Colorado as well as four retail locations with combined sales that have kept it in the top tier of operators in the state.

MDCL plans to pursue other acquisitions and partnerships with similar, mature industry leading operators, in the birth place of the legal cannabis industry and beyond

These planned and prospective transactions are helping to realize the promise of MDCL’s vision to establish an industry-leading, fully-integrated cannabis company that delivers resources to entrepreneurs in the industry and soon, products to consumers.

“Building upon MMT’s established expertise as consultants that have helped win licenses and establish operations in 17 states with over 100 clients, these moves are keeping the promise of Medicine Man Technologies’ vision to become an operator in this space,” says Andy Williams, Medicine Man Technologies’ Chief Executive Officer. “Once officially brought into the fold, MDCL’s annual revenue run rate will exceed $40 million. We couldn’t be more excited about what the future holds.”

Because MMD is a holder of cannabis licenses issued by the Marijuana Enforcement Division (MED) in the State of Colorado, the acquisition of MMD will require the passing of the currently-introduced Colorado HB19-1090 (https://leg.colorado.gov/bills/hb19-1090) which is currently working its way through the legislature, with support of the current governor. If HB19-1090 becomes law, it will allow for public company ownership of Colorado-licensed cannabis businesses.

The final acquisition will require the approval of the MED, as well as local city and county rules concerning the transfer and sale of ownership interest. Due to current legal restrictions, rather than acquiring a direct right to purchase the entity, MDCL has agreed to license MMD’s company brand globally and issue warrants that can only be exercised by the exchange of equity of MMD for common stock of MDCL at an agreed upon value subject to approval by the MED and the warrant holders electing to exercise.

MDCL had previously disclosed in its SEC filings of its intent to acquire MMD, as several persons connected to MDCL are also owners of MMD, including Andy Williams, current CEO of MDCL. MDCL has obtained independent valuations of the entities to be acquired. The relevant term sheet provides that the value of the shares to be issued to each owner of the entities to be acquired shall be consistent with these independent valuations.