Cresco Pharma is to acquire 100 per cent of Health House International (HHI) under a non-binding term sheet agreement.
Switzerland-based Medical cannabis product developer, Cresco Pharma, has said that the $4.6m (~£3.76m) acquisition of international medical cannabis distributor, Health House, will unlock a number of new markets for the company across the UK, Europe and Australia.
The acquisition is subject to Creso completing satisfactory due diligence on Health House’s businesses.
Group CEO and managing director of Cresco Pharma, William Lay, said: “The proposed acquisition of Health House has a number of potential benefits for Creso Pharma.
“Subject to a formal Scheme Implementation Deed being executed, implementation of the scheme would result in Creso Pharma significantly strengthening its global distribution capabilities and unlocking a number of new markets across the UK, Europe and Australia.
“The company intends to undertake due diligence on Health House’s operations immediately and explore the potential to leverage the group’s existing relationships for Creso Pharma’s own product ranges.
“Further, the company will investigate other potential opportunities including HHI’s existing EU-GMP product manufacturing capabilities and how these can further benefit Mernova, SSH and Creso Switzerland as we push to establish a presence in Europe and the UK.
“We look forward to progressing work towards implementation of the Scheme and will provide ongoing updates as due diligence requirements are met and additional opportunities materialise.”
The news follows the failed merger between Health House and Zelira Therapeutics Limited. The proposed acquisition was terminated due to a “substantial change in market conditions since the scheme was originally announced”.
Health House currently has supply agreements in place with several pharmaceutical grade GMP-certified manufacturers and producers of medicinal cannabis products, and also owns a medicinal cannabis consultancy in the EU.
The company is currently supporting a non-interventional study in Germany, launched by another Health House group company, that considers the effect on quality of life of patients and the safety and tolerability of cannabis medication.
Recently, Health House announced that its wholly-owned subsidiary CanPharma GmbH has continued its strategy to enter into preferred supplier agreements with German statutory health insurance (SHI) funds, securing agreements with five funds to date.
CanPharma’s latest agreement with Techniker Krankenkasse, the largest German statutory health insurance fund represents more than 10 million insured individuals, bringing the total number of patients that SHI funds cover, with preferred supplier agreements with CanPharma, to over 35 million, representing almost 50 per cent of the total number of insured Germans.
Creso Pharma has stated that the proposed acquisition of Health House would create a global organisation with strong medicinal cannabis production and distribution capabilities, as well as a growing revenue profile. However, it emphasises that, until due diligence is completed and a binding Scheme Implementation Deed is executed by the parties, there is no certainty that the acquisition of Health House will proceed.
Whitehouse remarks on “wrongful detainment” of Griner for Russian cannabis charges
The basketball star has been sentenced to nine years for allegedly smuggling cannabis medicines into Russia.
American basketball player, Brittney Griner, aged 31, has been sentenced to nine years in prison in Russia after she was caught in possession of cannabis.
As well as a nine-year sentence for possession of vape cartridges containing cannabis, the WNBA star and two-time US Olympic champion has also been ordered to pay a fine of ₽1m (~£13,745).
Some reports have suggested that the development could see the US and Russia negotiating over a prisoner exchange.
President Joe Biden’s office released a statement on the sentencing of what it describes as the “wrongfully detained” Griner, who has been detained since February,
Biden stated: “Today, American citizen Brittney Griner received a prison sentence that is one more reminder of what the world already knew: Russia is wrongfully detaining Brittney.
“It’s unacceptable, and I call on Russia to release her immediately so she can be with her wife, loved ones, friends, and teammates.
“My administration will continue to work tirelessly and pursue every possible avenue to bring Brittney and Paul Whelan home safely as soon as possible.”
Griner’s agent, Lindsay Kagawa Colas, said the star was being used as a “political pawn”.
Today’s sentencing of Brittney Griner was severe by Russian legal standards and goes to prove what we have known all along, that Brittney is being used as a political pawn. We appreciate and continue to support the efforts of @POTUS and @SecBlinken to get a deal done swiftly[1/3]
— Lindsay Kagawa Colas (she/her) (@kagawacolas) August 4, 2022
In a press briefing by White House press secretary Karine Jean-Pierre and NSC co-ordinator for strategic communications John Kirby, Jean-Pierre stated: “We have repeatedly called for Russia to release her immediately so she can be with her wife, loved ones, friends, and teammates.
“Under President Biden’s direction, the US government continues to work aggressively, pursuing every avenue to bring home Brittney, Paul Whelan, and every American held hostage and wrongfully detained around the world.
“As you all know, we have made a substantial offer to bring her and Paul Whelan home. We urge Russia to accept that proposal.
“I’m not able to share more publicly at this time, but we are willing to take every step necessary to bring home our people, as we demonstrated with Trevor Reed. And that’s what we’re going to do here. I can assure you this is something the President and our national security team are focused on every single day.”
Griner has 10 days to appeal the verdict.
Flora Growth partners with Colombia’s largest indigenous tribe in joint cannabis venture
“We are honoured to be given the opportunity to work hand-in-hand with the Misak people,” said Luis Merchan, Flora’s Chairman and CEO.
Flora Growth has entered an agreement with one of Colombia’s main indigenous tribes to process and distribute cannabis products.
Flora Growth has entered into a joint venture agreement with Pharma Indigena Misak Manasr Sas, the largest indigenous tribe in Colombia, on the development of cultivation best practices, manufacturing, export and marketing of cannabis and cannabis-containing products.
Under the agreement, the outdoor cultivator, manufacturer and distributor will provide Manasr regulatory advice, technical and business support related to product development and distribution, promotion of products to be marketed under the Flora brand portfolio, and cannabis derivatives to complete product production.
Additionally, Manasr will work closely with Flora in developing cannabis pharmaceuticals and products and help advance the approvals and authorisations required for exports of cannabis from Colombia.
“We are honoured to be given the opportunity to work hand-in-hand with the Misak people,” said Luis Merchan, Flora’s Chairman and CEO.
“Through this partnership, we will collaborate with the tribe on the processing and distribution of their Colombian-grown cannabis while offering Manasr a powerful platform for product distribution. In return, Flora will be able to leverage the tribe’s unique regulatory positioning to expedite exports and increase global market penetration of Colombian cannabis goods.
“We look forward to a long-standing relationship with such a powerful community partner.”
The initial term of the agreement is three years, however, the intention is to create a “lasting and mutually beneficial relationship for the foreseeable future”, the company said.
This announcement comes two weeks after Flora Growth’s CEO Luis Merchan met with Colombian Senator Gustavo Bolivar, the author of a new bill to legalise recreational cannabis.
Bolivar, the key author of the bill, and Merchan discussed the top tenants of the bill, the bill’s implications for companies such as Flora in Colombia and what legalisation means for the country’s burgeoning domestic and international cannabis markets.
Akanda to contest liquidation of its Lesotho-based subsidiary
Bophelo Bio Science & Wellness (Pty) Ltd. has been liquidated by the Lesotho Court.
Akanda is intending to contest the liquidation of its subsidiary, Bophelo Bio Science & Wellness, after the decision was made following an unauthorized liquidation application and request by former executive chairman of Akanda, Louisa Mojela.
Akanda has stated that Mojela was recently terminated as executive chairman of the company and the Mophuti Matsoso Development Trust (MMD Trust), which the company believes was established by Mojela.
In an action taken without the Akanda’s knowledge, the Lesotho Court has ordered an insolvent liquidation of Bophelo. It has appointed Chavonnes Cooper of Cape Town, South Africa, as liquidator of Bophelo for purposes of maintaining the value of the assets owned or managed by Bophelo. The order was signed by the Honorable Justice Mokhesi on July 15, 2022.
CEO, Tej Virk, has stated that Mojela’s actions were prompted by her termination from the company, but that if the decision to reverse the liquidation is not taken, Akanda could see savings and profitability as a result of reduced expenditures and the elimination of losses associated with Bophelo.
Bophelo’s operations consist primarily of a Good Agricultural and Collection Practices (GACP) qualified hoop house and shade cloth outdoor grow site, which completed its first harvest in May 2022.
It is generating attributed run-rate operating losses of approximately $2m (~£1.66m) annually and was previously budgeted to receive nearly $2.5m of capital investment in 2022 to construct a 2.5-acre Cravo greenhouse for the 2023 growing season.
Akanda CEO, Tej Virk, stated: “The application that was filed by Ms Mojela to place Bophelo, our wholly-owned subsidiary, in liquidation was taken without Akanda’s prior authorization, knowledge or consent.
“We therefore have reason to believe that Ms Mojela’s actions reflect her efforts to retaliate against the company in response to her dismissal and removal from the board of directors of Akanda on 23 June, 2022, on the basis of a lack of focus on profitability under her leadership.
“It is appalling that Ms Mojela would take the extraordinary and significant action of seeking to cause Bophelo to be declared insolvent without consulting with, or obtaining the consent of, the board of directors or the senior management team of Akanda, which is the beneficial owner of 100 per cent of Bophelo’s equity interests, or even of the full board of directors of Bophelo itself.”
Located near T’sakholo in the Mafeteng District of the Kingdom of Lesotho, Bophelo is one of the largest licensed landholders engaging in cannabis cultivation in the country. It leases the premises on which it operates from the MMD Trust, pursuant to a long-term agreement.
Akanda has stated that it intends to convene a special committee to investigate Mojela’s actions and conduct, including actions and conduct taken by her prior to her filing of the liquidation application, and will pursue all of its available legal rights and remedies against Mojela and the MMD Trust for taking this unauthorized action.
The company also intends to contest and seek to reverse the determination by the Lesotho Court to place Bophelo in liquidation, and will seek to recover significant loans that it has made to Bophelo to fund the execution of Bophelo’s business plan, including payment of rents and staffing costs, in the event that the Lesotho Court does not reverse its determination to place Bophelo in liquidation.
Mojela has been terminated as chairman of Bophelo for Cause, as a “bad leaver”, as a result of her improper and unauthorized action to seek to place Bophelo in liquidation.
Virk added: “Akanda believes that in this situation, Ms Mojela, our former executive chairman, failed to consider or act in the best interests of either Akanda or our shareholders.
“We intend to reclaim what rightfully belongs to Akanda shareholders, which includes the Akanda Bokamoso Empowerment Trust, which was established to support our hard working and loyal staff at the Bophelo campus in Lesotho. While doing so, we remain committed to our mission of helping people lead better lives through improved access to high quality medical cannabis products.
“Having a presence in Africa was always about building for the long-term and making a social impact on our communities. In May 2022, Akanda acquired Portugal-based Holigen, an EU GMP-certified medical cannabis producer, which has the means to potentially contribute profits to Akanda over the next six to nine months.
“With Holigen, Akanda believes it has more than sufficient capacity to produce premium quality indoor, outdoor and greenhouse medical cannabis within the European Union as the market matures. Additionally, with shifting market dynamics, we have found higher demand from German and UK customers for product produced in Portugal than Lesotho due to evolving EU regulations.
“In the event, we are unable to reverse the determination of the Lesotho Court, Akanda may actually experience considerable savings and greater profitability as a result of reduced expenditures and the elimination of losses associated with Bophelo’s operations.
“Financially, the reality is that, an Akanda, without Bophelo, is on an accelerated path to profitability and positive free cash flow. As a team, we are focused on our core markets in the UK and Europe, and are already executing on a number of commercial sales agreements, all of which will leverage our Portuguese operations.
“Despite these realities, Akanda remains committed to Bophelo, its employees and the longer-term ramp-up of cannabis markets in Africa.”
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