Exclusive Option Agreement
Global Hemp Group has executed an Exclusive Option Agreement (the “Agreement”) to acquire Serres Thériault (2021) Inc. (“STI”), a multi-faceted vertically integrated cannabis operator in New Brunswick.
This transaction provides the Company a clear pathway to further diversify its activities in the industry and importantly, access to licenses from Health Canada. This will be an important step in furthering the Company’s R&D ambitions for its Health and Wellness division, which initial foundation encompasses the Exclusive Licenses relating to key patents and IP acquired from Apollon Formularies plc in 2023.
Pinnacle Farms - onsite retail outlet
STI’s offsite retail store located in St. Quentin, New Brunswick, opened its doors to the public in November 2023. This is one of only eight exclusive private retail outlets located in the province of New Brunswick. STI advises that sales at this retail location have exceeded expectations to date and has already reached profitability.
Pinnacle Farms, a second retail operation located onsite (picture to the left) is slated to open in April 2024. This store will be licensed as a Farmgate retail model operation in New Brunswick with exclusive distribution of products manufactured by STI.
Current Operations and Expansion Plans:
STI’s current micro processing license gives it authorization to sell dry cannabis products to provincial authorities and other licensed producers across Canada. The site is currently authorized to sell seven approved products, with seven additional products having been submitted and are pending approval. STI advises that preparations are underway for expansion of the current packaging area, including the addition of authorized activities for processing and transformation, which are pending approval by Health Canada. This addition of activities will allow for sale of cannabis extracts, cannabis topicals and cannabis edibles, with four new cannabis products in these categories ready for submission.
Focus on Quality and Innovation:
STI is focused on using craft quality cannabis at an attractive price point. In addition, an exclusive deal with a Cannabis Research License located onsite, allows STI to develop exciting new strains, recipes and proprietary products that it will introduce on a national level to first time cannabis consumers, cannabis enthusiasts, and connoisseurs alike. Part of STI’s growth strategy entails expansion of its R&D efforts.
Product distribution from Pinnacle Farms, STI’s onsite retail store, is expected to begin April. STI is in discussion with a Quebec partner to increase its distribution channels into the provinces of Quebec and Ontario. In addition, STI will upgrade to a Standard Processing, Packing and Sales License, with further upgrades to include a Cultivation License for a one-acre outdoor cultivation site. The compound will encompass every permitted activity in the Canadian Cannabis Industry. Construction for the planned upgrades has already been completed.
Distribution and Hemp Production Partnerships:
STI also has an exclusive agreement with a hemp producer in New Brunswick that will be focusing on production of 500 acres of hemp for cannabinoid extraction of a highly sought after CBG strain for the 2024 cultivation season.
Company representatives were pleased with their visit to the STI facilities in New Brunswick. Experience has shown that this industry is very much about the people, and we are confident that we have found a group that we can work with to build a successful business and create shareholder value going forward.
Deal Terms
For information on the terms of the Option Agreement, see the Company’s news release of January 15, 2024.