- The acquisition of HemPoland accelerates opportunities for growth in the European market as part of TGOD’s international strategy
- The company has received medical sales licensing for its Ancaster, Ontario, facilities – one of many sites where TGOD aims to cultivate cannabis products
- The company recently closed a $75 million bought deal financing to further its expansion plans in Latin America and Europe
Cannabis company The Green Organic Dutchman Holdings Ltd. (TSX: TGOD) (OTCQX: TGODF) has announced the acquisition of HemPoland and the closing of a new bought deal financing, part of several recent developments demonstrating the company’s strong commitment to international expansion and the provision of immediate accretive revenue. The HemPoland acquisition has already received approval from the Toronto Stock Exchange (http://cnw.fm/Cnhn4).
According to The Green Organic Dutchman CEO Brian Athaide, the transaction is a key milestone in the company’s long-term acquisition strategy. It delivers immediate revenue to shareholders while opening up a new vertical for the company. It also provides evidence of the company’s growth toward its goal of having operations in 12 countries on three continents by the end of the year.
TGOD recently announced efforts to boost its number of dispensaries in Jamaica to five by early next year and to launch cultivation on land leases there by the end of this year. The company also expects approval from authorities in Denmark later this year to begin cultivation there, and it is pursuing research and development facilities in Denmark as well, according to an update to investors issued this month (http://cnw.fm/4xVZN).
The company is also seeing progress on Canadian cultivation facilities in Hamilton, Ontario, and Valleyfield, Quebec, where it expects to begin growing next year, and it has received a medical sales license from Health Canada for its Ancaster, Ontario, facility (http://cnw.fm/9j6xT), where it expects to begin selling to medical patients in January and, shortly thereafter, to the adult recreational use market.
“As we prepare for our Founders Club product launch in January 2019, this is a critical step in our path to becoming the global leading organic cannabis brand,” Athaide stated in the news release.
TGOD’s investor update also noted that the company has established additional $75 million bought deal financing that will be used to advance its expansion in Latin America and Europe.
“With potential consumer populations of nearly 750,000,000 and 650,000,000 respectively, these markets represent a key development opportunity in the Company’s global growth plan,” the report states.
TGOD paid $7.75 million in cash and also issued nearly two million restricted shares as part of the HemPoland transaction. The shares will be escrowed for a three-year period starting from the closing date of the deal. There is an additional contingent consideration of up to that million deferred shares that is dependent on an EBIDTA achievement of $32 million on behalf of HemPoland by 2021.
The Green Organic Dutchman is also set to invest $10.3 million in HemPoland’s innovative product development practices.
HemPoland is the first private entity in Poland to obtain a license for the growing and manufacturing of cannabis sativa. The company focuses on innovative solutions and its flagship product, called CannabiGold, is being exported to various European countries like the Netherlands, Germany, Switzerland and the United Kingdom.
The European cannabis market offers excellent opportunities for growth. It features over three quarters of a billion people, and HemPoland already has a well-established position as a leading manufacturer and marketer of premium CBD oils within this market.
Cannabis and cannabis oil products have been offered for sale legally in various European countries, including France, Luxembourg, Austria and others, since 2017, according to the European Monitoring Centre for Drugs and Drug addiction (http://cnw.fm/TInO6). Currently, Europe has rather restrictive Union and national policies, but there are signs that the European market will begin opening up soon.
Germany’s Supreme Court made it easier for patients to qualify for prescriptions for cannabis-based products in 2016 (http://cnw.fm/dh0XK), leading to a rapid hike in the number of patients receiving such treatment – from a few hundred to 13,000 in 2017. If all EU countries pass such legislation, Europe is predicted to become the largest legal cannabis market in the world, a recent report suggests (http://cnw.fm/E2j8T).
In 2018, more than six countries announced new legislative frameworks aimed at simplifying access to cannabis-based products. It is anticipated that, by 2028, the volume of Europe’s cannabis market will reach 115.7 billion euros.
By acquiring HemPoland, TGOD will gain access to this significant potential clientele via the Polish company’s well-established distribution network, as well as to its state-of-the-art hemp oil extraction technology and the premium CannabiGold brand.
The Green Organic Dutchman is licensed to cultivate medical cannabis and focused on growing high quality, organic cannabis via sustainable principles. The company currently has a funded capacity of nearly 375,000 pounds and is building cultivation facilities in Canada and Jamaica totaling almost 1.4 million square feet.
For more information, visit the company’s website at www.TGOD.ca
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