Company enhances management team & board of directors, announces new chair
Toronto, Canada, December 23, 2019 – WeedMD Inc. (TSX-V:WMD) (OTCQX:WDDMF) (FSE:4WE) (“WeedMD” or the “Company”), a federally-licensed producer and distributor of medical-grade cannabis, and Starseed Holdings Inc. (“Starseed”), a medically-focused, federally-licensed cannabis company, are pleased to announce the closing of the previously announced acquisition of Starseed Holdings by WeedMD (the “Acquisition”).
Concurrent with the closing, WeedMD also completed the previously announced private placement of subscription receipts (the “Subscription Receipts”) with the LiUNA Pension Fund of Central and Eastern Canada (“LPF”), for aggregate gross proceeds of $25 million. The issue price of each Subscription Receipt is $1.0832, and each Subscription Receipt shall be automatically exchangeable into one WeedMD common share upon its shareholders approving certain matters associated with the financing at a meeting scheduled for February 4, 2020.
“We officially welcome the Starseed team to the WeedMD family which together will kick-off 2020 as a very compelling, vertically-integrated cannabis company that will execute across the entire value chain,” said Keith Merker, CEO of WeedMD. “Starseed’s unique medical distribution platform complements WeedMD’s high-quality cultivation and processing platform. This partnership, along with the $25 million strategic equity investment by LPF, positions WeedMD and its shareholders with a fortified balance sheet and one of the most captive medical cannabis businesses in the country as we enter the new year.”
Following today’s closing, Starseed’s management team, which brings extensive medical, operating, and financial expertise, in addition to strong industry and client relationships, integrates into WeedMD’s senior leadership team as follows:
- Keith Merker, CEO (maintains role)
- Angelo Tsebelis, formerly President of Starseed, assumes the role of President of WeedMD
- Nichola Thompson, CFO (maintains role)
- Stephen Ng, formerly CFO of Starseed, is appointed to Chief Strategy Officer of WeedMD
- Dr. Peter Blecher, formerly Chief Medical Officer of Starseed, assumes the role of Chief Medical Officer of WeedMD
Additional information about WeedMD’s current management team can be found here.
In addition to the Starseed leadership appointments, WeedMD’s board of directors is now comprised of four representatives from WeedMD and three representatives from Starseed.
WeedMD is pleased to announce that seasoned industry leader George Scorsis is appointed as Executive Chair of its board of directors. For the last six months, Mr. Scorsis has served as executive advisor to the WeedMD board and leadership team and is widely recognized in the cannabis and beverage industries for building, leading and managing high-performing management teams.
WeedMD extends its gratitude to Michael Kraft who has served as Chair of its board of directors since the Company’s inception. As one of WeedMD’s co-founders, Mr. Kraft has been integral to its growth and success over the years and we are pleased he has accepted the role of strategic advisor to the board which includes the existing WeedMD directors:
- Keith Merker, currently CEO of WeedMD
- Gail Paech, formerly Associate Deputy Minister, Ministry of Health, Ontario
- Michael Pesner, previously on the board of SAQ (Société des alcools du Québec), and KPMG executive leader
WeedMD is pleased to welcome three new board directors from Starseed:
- Angelo Tsebelis, currently President of WeedMD
- G. Edmund King, former CEO and Chairman of CIBC Wood Gundy
- Dr. Hugh Scully, previously President of both the Ontario & Canadian Medical Associations
Additional information about WeedMD’s current board of directors can be found here.
The Company would also like to thank Rick Moscone and Kevin McGovern who have elected to step down following three years and one year of service, respectively.
Pursuant to the Acquisition, WeedMD acquired 100% of the issued and outstanding common shares of Starseed and in exchange Starseed shareholders received a total of approximately 71.8 million common shares of WeedMD. Certain shareholders of Starseed, holding approximately 49 million common shares of WeedMD, have agreed to an 18-month lock-up and leak out agreement.
About WeedMD Inc.
WeedMD Inc. is the publicly-traded parent company of WeedMD Rx Inc., a federally-licensed producer of cannabis products for both the medical and adult-use markets. The Company owns and operates a 158-acre state-of-the-art greenhouse, outdoor and processing facility located in Strathroy, Ontario. WeedMD also operates CX Industries., a wholly-owned subsidiary of WeedMD Inc., from the Company’s fully-licensed 26,000 sq. ft. Aylmer, Ontario production facility which specializes in cannabis extraction and processing. With the recent acquisition of Starseed Medicinal Inc., a medical-centric licensed holder with operations in Bowmanville, Ontario, WeedMD has expanded its multi-channeled distribution strategy. Starseed’s industry-first, exclusive partnership with LiUNA, the largest construction union in Canada, along with other employers and union groups complements WeedMD’s direct sales to medical patients. The Company maintains strategic relationships across the seniors’ market and supply agreements with Shoppers Drug Mart as well as six provincial distribution agencies where its adult-use brands Color Cannabis and Saturday are sold.
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Forward Looking Information
This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation which are based upon WeedMD’s current internal expectations, estimates, projections, assumptions and beliefs and views of future events. Forward-looking information can be identified by the use of forward-looking terminology such as “expect”, “likely”, “may”, “will”, “should”, “intend”, “anticipate”, “potential”, “proposed”, “estimate” and other similar words, including negative and grammatical variations thereof, or statements that certain events or conditions “may”, “would” or “will” happen, or by discussions of strategy.
The forward-looking information in this news release is based upon the expectations, estimates, projections, assumptions and views of future events which management believes to be reasonable in the circumstances. Forward-looking information includes estimates, plans, expectations, opinions, forecasts, projections, targets, guidance or other statements that are not statements of fact. Forward-looking information in this news release include, but are not limited to, statements with respect to internal expectations, expectations with respect to actual production volumes, expectations for future growing capacity and the completion of any capital project or expansions. Forward-looking information necessarily involve known and unknown risks, including, without limitation, risks associated with general economic conditions; adverse industry events; loss of markets; future legislative and regulatory developments; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the cannabis industry in Canada generally; the ability of WeedMD to implement its business strategies; competition; crop failure; and other risks.
Any forward-looking information speaks only as of the date on which it is made, and, except as required by law, WeedMD does not undertake any obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for WeedMD to predict all such factors. When considering this forward-looking information, readers should keep in mind the risk factors and other cautionary statements in WeedMD’s Annual Information Form dated June 21, 2019 (the “AIF”) and other disclosure documents of WeedMD filed with the applicable Canadian securities regulatory authorities on SEDAR at www.sedar.com. The risk factors and other factors noted in the AIF and other disclosure documents could cause actual events or results to differ materially from those described in any forward-looking information.
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