TORONTO and DENVER, Jan 02, 2020 (GLOBE NEWSWIRE via COMTEX) -- MJardin Group, Inc. ("MJardin" or the "Company") /zigman2/quotes/208919867/delayed CA:MJAR -15.79% (otcqx:MJARF), a leader in premium cannabis production, announced today that it has entered into a definitive agreement with Harvest DCP of Nevada, Cheyenne Holdings LLC, a division of Harvest Health and Recreation Inc. /zigman2/quotes/201825604/delayed CA:HARV -2.65% to sell all of its interest in GreenMart of Nevada LLC, which possesses a Nevada Marijuana Cultivation Facility License and operates the cultivation facility at 5421 E. Cheyenne, Nevada, ("Cheyenne") for a total consideration of US$35 million in cash, comprised of US$30 million on December 31, 2019, plus US$5 million upon license transfer (the "Transaction"), subject to regulatory approvals.
The Company will use the proceeds of the transaction to reduce its debt obligations and for working capital requirements for its 2020 plan.
"We are pleased with the return on our investment at Cheyenne. The proceeds from the Transaction significantly reduce our debt while strengthening our financial position towards funding our working capital requirements in 2020," said Pat Witcher, President and CEO of MJardin. "We are starting the new year on stronger footing with a clear view on accomplishing our profitability targets based on all of our key assets coming online."
MJardin continues to focus on growing operations in Nevada through Cannabella, an extraction, distribution and consumer product company acquired in the Spring of 2019 (license transfer pending). Cannabella's products are already in approximately 50 of the 68 retail dispensaries in Nevada, and the Company anticipates that it will be able to expand to many of the new dispensaries being opened following the recent grant of approximately 50 additional licenses.
The Transaction has been unanimously approved by the Board of Directors of the Company, following the unanimous recommendation of a special committee of independent directors of the Company. Canaccord Genuity Corp. ("Canaccord Genuity") acted as exclusive financial advisor to MJardin. Canaccord Genuity and Cormark Securities have provided fairness opinions to the special committee of the Board of Directors of the Company stating that, as of the date of such opinions, and based upon and subject to the assumptions, limitations and qualifications stated in such opinions, the consideration being received under the Transaction is fair, from a financial point of view, to the Company. Foley & Lardner LLP acted as U.S. counsel and Norton Rose Fulbright Canada LLP acted as Canadian counsel to MJardin on the Transaction.
About MJardin Group
MJardin is a cannabis management platform with extensive experience in cultivation, processing, distribution and retail. For over 10 years, MJardin has refined cultivation methodologies, developed state of the art facilities and implemented vertical integration for and on behalf of license owners. MJardin is based in Denver, Colorado and Toronto, Canada. For more information, please visit www.mjardin.com .
The CSE has not in any way passed upon the merits of and has neither approved nor disapproved the contents of this news release.
This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
This news release contains forward-looking information based on current expectations. Statements about, among other things, future developments and the business and operations of MJardin, our production capacity, our production results, trading of MJardin's shares on the OTCQX Best Market, the receipt of any pending regulatory approvals or licenses, the growth of our global footprint and our intentions to leverage our scale for continued organic growth and to pursue strategic investments are all forward-looking information. These statements should not be read as guarantees of future performance or results. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those implied by such statements. Such factors include, but are not limited to: our ability to identify and pursue growth, financing and other strategic objectives, and the regulatory and economic environments in the jurisdictions we operate or intend to operate or investment in. Although such statements are based on management's reasonable assumptions at the date such statements are made, there can be no assurance that the proposed acquisition will occur and that such forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such forward-looking information. Accordingly, readers should not place undue reliance on the forward-looking information. MJardin assumes no responsibility to update or revise forward-looking information to reflect new events or circumstances unless required by applicable law.
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