Neptune Wellness to obtain Hemp processor SugarLeaf Labs – Cannabis News | Marijuana News



Establishes U.S. footprint with processing capacity of 1,500,000kg

LAVAL, QC, May perhaps 9, 2019 /CNW Telbec/- Neptune Wellness Options Inc. (“Neptune” or the “Company”) (NASDAQ: NEPT) (TSX: NEPT) these days announced the signing of a definitive agreement to obtain substantially all of the assets of SugarLeaf Labs, LLC and Forest Treatments LLC (collectively, “SugarLeaf”), a registered North Carolina-primarily based industrial hemp corporation delivering extraction solutions and formulated solutions.

By means of SugarLeaf, Neptune establishes a U.S.-primarily based hemp extract provide chain, gaining a 24,000 square foot facility positioned in the essential U.S. Southeast area. SugarLeaf’s cutting-edge cold ethanol processing facility with a processing capacity of 1,500,000 kg makes use of hemp cultivated by licensed American growers constant with federal and state regulations to yield higher-good quality complete and broad-spectrum hemp extracts. The U.S. market place for hemp is building quickly and represents a important chance for the customer solutions sector.

Neptune will obtain SugarLeaf on a debt-no cost basis for initial consideration at closing of US$18 million, paid as US$12 million in money and US$six million in widespread shares. By reaching specific annual adjusted EBITDA and other efficiency targets, added consideration of up to US$132 million would be paid more than each and every of the subsequent 3 years as a mixture of money and shares for a maximum aggregate buy price tag of up to US$150 million. The Transaction is anticipated to close on or prior to July 31st, 2019, upon completion of typical closing needs, which includes regulatory and stock exchange (NASDAQ and TSX) approvals.

“With Neptune’s Canada-primarily based operations ramping up production and the cannabis sector increasing exponentially about the globe due to an evolving legal worldwide framework, now is the time to establish a state-of-the-art provide chain in the U.S. marketplace,” stated Jim Hamilton, President and CEO of Neptune. “SugarLeaf’s capacity, effective production of higher-good quality extracts, and robust supplier relationships, combined with our current competencies in buyer relationships and science-primarily based formulations, creates a robust worth proposition to U.S. brands who want to give differentiated solutions to buyers. Neptune’s objective is to be a world’s leader in extraction, purification and formulation of worth-added cannabis and all-natural well being solutions. We warmly welcome the SugarLeaf group to Neptune.”

“We are thrilled to be joining forces with Neptune” stated Peter Galloway, CEO of SugarLeaf. “The SugarLeaf group appears forward to combining our strengths with that of the Neptune group, thereby accelerating our combined development and improvement.”

Further Data on SugarLeaf

SugarLeaf’s Conover, North Carolina extraction facility has a processing capacity of 1,500,000 kg. SugarLeaf also possesses established, strong relationships with nearby farmers and customer item organizations seeking for higher purity hemp extracts to add to their item lines. The current management group at SugarLeaf consists of seasoned operators who will continue to operate the North Carolina extraction facility.

Sugarleaf has very effective hemp extraction capabilities in an essential cultivation area of the U.S., created by means of years of knowledge in processing and extraction techniques. The corporation has been at the center of an comprehensive neighborhood that supports hemp extract production and refining, and makes use of the most sophisticated extraction gear readily available – from stainless centrifuges to higher capacity filtering and purifying strategies.

In addition, Sugarleaf sources hemp material from nearby licensed hemp growers who use accountable increasing practices, which includes organic and regenerative farming strategies. SugarLeaf makes use of non-GMO ethanol at very cold temperatures with sophisticated lab strategies that make cannabinoid-wealthy extracts.

Further Transaction Specifics

Upon closing of the Transaction, Neptune will spend initial consideration of US$18 million, comprising US$12 million of money and US$six million in Neptune shares. Neptune plans to finance all or portion of the money portion of the initial consideration by means of a lending arrangement with a bank or other institution, or a private or public equity financing (or a mixture of such financings). An added US$six million in shares will be paid when specific production and income milestones are accomplished. Neptune will also spend an added US$16 million, 50% in money and the remainder in Neptune widespread shares, really should SugarLeaf’s adjusted EBITDA exceed US$eight million for any rolling 12-month period starting April 1, 2019. Functionality-primarily based considerations have also been structured and will be primarily based upon a percentage incremental adjusted EBITDA in 2021 and 2022 above a minimum development level of up to a maximum of US$110 million. Neptune has the selection to spend these added considerations with a mixture of money and shares.

The Transaction will be topic to typical post-closing adjustments and customary terms and circumstances. The Transaction is anticipated to close on or prior to July 31st, 2019.

TD Securities Inc. is acting as monetary advisor to Neptune and Osler, Hoskin &amp Harcourt LLP is acting as legal counsel to Neptune, and Vicente Sederberg LLP is acting as U.S. regulatory counsel to Neptune. Fluet, Huber &amp Hoang is acting as legal advisor to SugarLeaf.

For more information about Neptune’s US products and services portfolio, please write [email protected]

About Neptune Wellness Options Inc.

Neptune Wellness Options specializes in the extraction, purification and formulation of well being and wellness solutions. Licensed by Well being Canada to course of action cannabis at its 50,000 square foot facility positioned in Sherbrooke, Quebec, Neptune brings decades of knowledge in the all-natural solutions sector to the legal cannabis sector. Leveraging its scientific and technological knowledge, Neptune focuses on the improvement of worth-added and differentiated solutions for the Canadian and worldwide cannabis markets.

Neptune’s activities also involve the improvement and commercialization of turnkey nutrition options and patented components such as MaxSimil®, and of a assortment of marine and seed oils. Its head workplace is positioned in Laval, Quebec.



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