BC Craft Supply Announces Signing of a Definitive Agreement to Acquire Somo Industries Inc. dba Feelwell Brands
VANCOUVER, British Columbia, April 20, 2021 (GLOBE NEWSWIRE) — BC Craft Supply Co. Ltd. (the “Company” or “BC Craft”) (CSE: CRFT) (OTC:CRFTF) (FSE:ZZD1) is pleased to announce that it has signed a share exchange agreement (the “Definitive Agreement“) to acquire 100% of Somo Industries Inc. dba Feelwell Brands (“Somo Industries”). The Definitive Agreement is the result of negotiations between BC Craft and Somo Industries subsequent to the letter of intent between the parties, as announced on March 23, 2021.
Based in California, Somo Industries operates Clix, a licensed cannabis brand operating in the state of California. Clix is focused on bringing wellness inspired, micro-dosed, dispensed cannabis to the California market. It has two products currently for sale in California: Herbal Blended Pre-rolls and Herbal Blended Tablets. It plans to bring two more products to market later this year: Herbal Blended Flower Sticks and Hot Drink Elixirs (THC infused Golden Turmeric Milk, Chai Latte and Hot Chocolate).
Terms of the Acquisition
Under the terms the Definitive Agreement, BC Craft will acquire 100% of Somo Industries (the “Acquisition“) in return for the issuance of 30,812,320 units (“Units”) of the Company to the vendors, to be issued at a deemed value of $0.08925 per Unit. Each Unit is comprised of one common share (each a “Share”) and one-half of one (1/2) common share purchase warrant (with two half warrants being a “Warrant”), each whole Warrant is exercisable to acquire one additional Share at a price of $0.12075 for a period of two years. The Shares and Warrants are subject to a four month and one day hold period. The closing of the acquisition of Somo Industries is scheduled for May 11, 2021 to allow for applicable notice periods to be completed as required under the Somo Industries unanimous shareholders’ agreement.
The Acquisition constitutes a “related party transaction” as such term is defined by Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101“), given that Ms. Regan McGrath, the CFO and a director of BC Craft is also a senior officer of Somo Industries and owns 3.16% of Somo Industries common shares. Upon completion of the Transaction, Ms. McGrath will acquire an aggregate of 974,368 Shares and 487,184 Warrants. Prior to the completion of the Acquisition, Ms. McGrath did not beneficially own or control, directly or indirectly, any common shares in the capital of BC Craft. Upon closing of the Acquisition, Ms. McGrath will beneficially own and control, through a holding company, an aggregate of 974,368 common shares of BC Craft, representing approximately 0.43% of the issued and outstanding common shares of BC Craft on a non-diluted basis and 487,184 Warrants of BC Craft. Ms. McGrath is also the holder of 272,000 stock options in BC Craft that were previously granted, but not related to this Acquisition.
The Company is relying on the exemptions from the valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101, given that the fair market value of the consideration paid under the Acquisition to Ms. McGrath does not exceed 25% of the market capitalization of the Corporation, as determined in accordance with MI 61-101. The Acquisition has been approved by the independent directors of the Company.
Matthew Watters, CEO of BC Craft stated, “With this acquisition we are open for business in California, the biggest legal cannabis market in the world. With this partnership, we will contribute to the growing positive perception of cannabis by focusing on wellness, performance, and precise delivery systems. We welcome Somo Industries and their brand Clix to our team and we look forward to building a business together that supports the good of the cannabis industry in Canada, the USA and abroad”.
For further information please contact Matthew Watters, Director, at (604) 687-2038.
About BC Craft Supply Co. Ltd.
Based in Vancouver, British Columbia, BC Craft Supply Co. has aggregated the best legacy-era talent from Canada’s craft cannabis industry, which boasts an international reputation. The team at BC Craft supports the most trusted cannabis cultivators in Canada to transition into their supply chain, bringing with them their unique cultivars and years of experience with the plant. In exchange for support with licensing, compliance and distribution, cultivators will sign on as a BC Craft supplier. This makes BC Craft uniquely positioned to be the premium cannabis brand in Canada.
BC Craft’s subsidiary, Medcann Health Products Ltd., is a Health Canada licensed cultivator and processor with a license to sell medical cannabis products in Canada.
Matthew Watters, Direct Phone: 604-687-2038
Neither the Canadian Securities Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this press release, which has been prepared by management.
This news release includes certain “forward-looking statements” under applicable Canadian securities legislation. Forward-looking information in this press release includes statements relating to Somo Industries ability to provide the Company with access to the California cannabis space. Although the Company believes that the material factors, expectations and assumptions expressed in such forward-looking statements are reasonable based on information available to it on the date such statements were made, no assurances can be given as to future results, levels of activity and achievements and such statements are not guarantees of future performance.
Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The forward-looking information contained in this release is expressly qualified by the foregoing cautionary statements and is made as of the date of this release. Accordingly, readers should not place undue reliance on forward-looking statements. BC Craft disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.