Heritage Cannabis closes acquisition of cannabinoid company Opticann; building on US expansion strategy

Heritage Cannabis Holdings Corp (CSE:CANN) (OTCMKTS:HERTF) announced Thursday it had completed the acquisition of Colorado-based Opticann Inc, an oral and topical cannabinoid company.

The deal is for an initial consideration of up to C$5 million in common shares and warrants of Heritage, the Toronto-based company said.

Opticann, which was founded by several former executives of MedReleaf – a Canadian medical cannabis company that was acquired by Aurora Cannabis Inc for $3.2 billion in 2018 – has the rights to exclusively sell CBD and CBG products made with the patented VESIsorb drug delivery system for optimized absorption and stability.

READ: Heritage Cannabis to acquire Colorado-based oral and topical cannabinoid company, Opticann for an initial consideration of up to C$5.0 million

“Bringing Opticann on board the Heritage platform provides us with a significant advantage in the advancement of our US presence and the ability to participate in the rapidly growing multi-billion dollar US CBD market,” said Heritage CEO Clint Sharples in a statement.

“We are advancing our offering with Opticann and are already leveraging our existing US presence with our Empower joint venture in Oregon. Together, our US team has the proven medical cannabis expertise to excel in this market.”

Deal terms

Under the terms of the deal, Heritage issued 15,838,982 shares, the majority of which will be held in escrow by Heritage and released subject to any reductions related to indemnification claims. Opticann will also receive 7,919,493 warrants exercisable at a price of $0.20 per Class A Exchangeable Share for a period of 24 months following the closing date, and 3,511,110 warrants exercisable for Class A Exchangeable Shares at a price of $0.30 for a 36-month period. The deal also includes 100,000,000 class B ‘milestone shares’ that are exchangeable for Heritage upon Opticann achieving certain milestones within set time frames.

Heritage has also agreed to pay additional consideration on certain conditional events being met, which will be determined at the time such events occur and paid out in shares.

The company will also issue 6,079,716 shares to Geocann LLC, which holds the exclusive worldwide rights to the VESIsorb delivery technology.

VESIsorb is a leading delivery system innovation for dramatically improving the stability and absorption of natural ingredients like cannabinoids, and is backed by a robust body of supporting scientific evidence spanning several decades.

Contact Angela at [email protected]

Follow her on Twitter @AHarmantas

Story by ProactiveInvestors