BCC Completes Acquisition of New Cannabis Assets
Company Expands Arizona Footprint – to Establish Third Dispensary Under H4L Brand
TORONTO, ON / ACCESSWIRE / March 14, 2017 / The Canadian Bioceutical Corporation (the “Company” or “BCC”) (CSE: BCC) (OTC: CBICF) today announced that further to its press release of February 6, 2017, the Company has completed the acquisition of the assets belonging to PerkAZ Property LLC, an Arizona registered company active in the cannabis space. The transaction includes a Management Agreement with Healing Center Wellness Center LLC (THC), a licensee under the Arizona Medical Marijuana Act (AMMA), as well as 44.3 acres of land in Chino Valley, AZ.
Transaction highlights
New dispensary to be established under the successful Health for Life (H4L) brand in the Greater Phoenix Area (GPA).
- Property included in the transaction is located adjacent to Big Chino aquifer, providing free access to water, making this a valuable asset for multiple purposes. The property has been appraised at US$1.5 million.
- Attractive valuation at US$4 million.
- US$3 million in cash.
- US$1 million in stock, issued at $0.75 per share.
Management commentary
“Developing the new dispensary license by leveraging our successful H4L and MPX brands will add further strength to our already highly profitable platform,” said Scott Boyes, President and CEO of BCC. “The ability to relocate this license to a relatively under-served area in the GPA, combined with the value of the Chino Valley property, makes this a very attractive transaction at the consideration paid. Our operational track record and proven access to capital make us a very attractive partner, putting us in a strong position to aggressively pursue further growth, both organically and through acquisitions.”
As the total number of dispensaries permissible in Arizona is capped at one per ten licensed pharmacies, the market remains tightly controlled. We see this reflected in market prices for cannabis, which remain strong, both for high quality flower and concentrates. The new dispensary will benefit from our strong brand recognition and proven marketing capabilities.
Beth Stavola, President of BCC’s U.S. operations
At the same time, we are adding production capacity in the Mesa area, which will enable us to serve the new dispensary with product, as well as expand the market share of our wholesale brand MPX.
Expansion and timelines
As the THC dispensary license is older than three years, it can be relocated to the Greater Phoenix Area, a rapidly growing metropolitan area with over 4.6 million people. The new dispensary will be operated under the Health for Life (H4L) brand, which currently operates two highly profitable BCC-supported dispensaries in the GPA, serving approximately 500 customers per day. Development of the new H4L dispensary is anticipated to take approximately 5-6 months. The Company anticipates the costs of acquiring a property for the new dispensary and developing it to H4L standards will be approximately US$1.2 million.
About The Canadian Bioceutical Corporation
BCC, an Ontario corporation, through its wholly owned subsidiaries in the U.S., provides management, staffing, procurement, advisory, financial, real estate rental, logistics and administrative services to two medicinal cannabis enterprises in Arizona. While the Company does not directly own, possess or sell cannabis or cannabis-infused products, it does provide substantial support and exerts considerable influence over these two businesses, which are legally authorized to sell medical cannabis and derivative products.
Under the Health for Life (“H4L”) brand, the two licensed dispensaries operate in the Mesa area, which is part of the rapidly growing Phoenix Metropolitan Statistical Area (MSA) with a population of 4.6 million people. Additionally, the Company supports the Melting Point Extracts (“MPX”) brand. The award winning MPX products have facilitated rapid growth of the brand’s wholesale business, now supplying a growing number of Arizona dispensaries.
The Company also leases a property in Owen Sound, Ontario, for which an application to Health Canada has been made for a cannabis production and sales license. In addition, the Company will continue its efforts related to its legacy nutraceuticals business.
Original press release: https://www.accesswire.com/457215/BCC-Completes-Acquisition-of-New-Cannabis-Assets
