- Enters into share purchase agreement to divest 51% of the Company’s equity stake in Bodhi Research for proceeds of $1.74 million, representing a 700% return on investment. Under the share purchase agreement, there is potential for the Company to divest the remaining 49% of its equity stake in Bodhi Research for an additional $2 million, which when combined, would represent an approximate return on investment of 1,500%.
- Reinforces Origin House’s stated commitment to monetize non-core assets and create shareholder value.
All financial figures in Canadian Dollars ($) unless otherwise noted.
OTTAWA, Dec. 10, 2018 /CNW/ – CannaRoyalty Corp. d/b/a Origin House (CSE: OH) (OTCQX: ORHOF) (“Origin House” or the “Company”), a leading North American cannabis products and brands company, today announced that Cannabis Royalties and Holdings Corp. (“CRHC”), a wholly-owned subsidiary of Origin House, has entered into a share purchase agreement (the “Agreement”), with Green Relief Inc. (“Green Relief”), to sell its equity stake in Bodhi Research & Development Inc. (“Bodhi Research”).
Pursuant to the Agreement, Green Relief will first purchase from CRHC and other vendors, 51% of all outstanding common stock (the “Share Purchase”) of Bodhi Research for $20 million in shares of Green Relief. Under the Agreement, there is also the potential for the future sale of the remaining 49% of the outstanding common stock of Bodhi Research for an additional $20 million, to be paid in Green Relief common shares.
Marc Lustig, Chairman and CEO of Origin House commented, “In 2018, our focus has been on positioning Origin House as the preeminent house of promising growth brands in the California market. To maintain this focus and crystalize value for shareholders, we have prioritized the sale of assets that are deemed non-core to our business. We are pleased to have generated substantial returns for shareholders over the past 12 months on the sale of these non-core positions and will continue to allocate proceeds to the expansion of our brand support and acceleration platform in California.”
Dr. Neilank K. Jha, Chairman and CEO of Bodhi Research commented, “Since 2016 when we founded Bodhi Research, Marc Lustig and his team have served as valuable strategic partners. We are grateful for their support and guidance. Origin House has brought a sophisticated capital markets approach to a maturing industry and Bodhi Research has been a beneficiary of their expertise.”
Bodhi Research conducts research trials for exploring the use of cannabis in the treatment of concussions and post–concussive syndromes. A previously disclosed, on April 7, 2016, CRHC entered into an agreement to acquire a 10% equity interest in Bodhi Research for $250,000. This strategic sale of 51% of the Company’s equity interest in Bodhi Research represents an approximate 700% return on investment for Origin House shareholders. Subject to the vendors’ right to exercise an option within 9 months of closing to retain the remaining 49% interest in Bodhi Research, the remaining 49% of the Company’s interest in Bodhi Research may also be sold to Green Relief, in which case CRHC’s total gross proceeds from the sale of its total 10% interest in Bodhi Research will be approximately $3.78 million, representing an approximate return on its investment of 1500%. Upon closing of the Share Purchase, Bodhi Research will be renamed “Green Relief Innovations Inc.” (“Green Relief Innovations”) and will be the research and development division of Green Relief. Dr. Neilank Jha will be appointed as Chairman & CEO of Green Relief Innovations.
“We are proud to have partnered with Dr. Neilank Jha and to have been an early investor in Bodhi Research. Neilank has combined his scientific and academic background with his keen business sense to provide substantial returns for Bodhi Research’s investors. Dr. Jha’s new appointment as Chairman & CEO of Green Relief Innovations will provide him a broader platform to continue building IP and commercialize products,” added Mr. Lustig.
About Bodhi Research
Bodhi Research and Development, Inc. is an Ontario-based research company founded by Dr. Neilank K. Jha, a Toronto based neurosurgeon. Bodhi Research is conducting research trials for exploring the use of cannabis in the treatment of concussions and post-concussive syndromes. Bodhi’s Research’s research has been done in collaboration with some of the world’s foremost experts in concussions and pain management.
About Dr. Neilank K. Jha MD, MSc, MBA
Dr. Jha holds his medical degree, neurosurgical training and spine fellowship from McMaster University and the University of Toronto. He holds MSc and MBA degrees from the London School of Economics and Ivey Business School respectively. He is a practising neurosurgeon and founded Bodhi Research in 2016. Dr. Jha, through fiscal conservatism, key partnerships and collaborations, has brought his initial investors an approximate return of 1500%. Upon closing of the Share Purchase, Dr. Jha will be appointed as Chairman & CEO of Green Relief Innovations.
About Green Relief
Green Relief Inc. is a Canadian licensed producer of medical cannabis under Health Canada’s Access to Cannabis for Medical Purposes Regulations (ACMPR). Founded in 2013, Green Relief is one of the only organizations in the world that uses aquaponics, resulting in fresh, pure medicinal cannabis products grown without harmful pesticides and fertilizers while not compromising quality or yields.
About Origin House
Origin House is a growing cannabis products and brands company operating across key markets in the U.S. and Canada, with a strategic focus on becoming a preeminent global house of cannabis brands. The Company’s foundation is in California, the world’s largest regulated cannabis market, where it delivers over 130 branded cannabis products to the majority of licensed dispensaries. Origin House’s brand development platform is operated out of five licensed facilities located across California, and provides distribution, manufacturing, cultivation and marketing services for its brand partners. The Company is actively developing infrastructure to support the proliferation of its brands internationally, initially through its acquisition of Canadian retailer 180 Smoke. Origin House’s shares trade on the Canadian Securities Exchange (CSE) under the symbol “OH” and on the OTCQX under the symbol “ORHOF”. Origin House is the registered business name of CannaRoyalty Corp. For more information, visit www.originhouse.com.
Forward Looking Statements
Statements in this news release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors disclosed here and elsewhere in Origin House’s periodic filings with Canadian securities regulators. When used in this news release, words such as “will, could, plan, estimate, expect, intend, may, potential, believe, should,” and similar expressions, are forward- looking statements.
Forward-looking statements may include, without limitation, statements relating to the timing and completion of the transactions contemplated under the Agreement, the execution of the Company’s strategy, new opportunities, the Company’s timing and process for expansion in Canada and globally, timing for the Company’s acquisition of 180 Smoke, new opportunities, future growth and other statements. There is no assurance that the Share Purchase will be completed as proposed or at all.
Although the Company has attempted to identify important factors that could cause actual results, performance or achievements to differ materially from those contained in the forward-looking statements, there can be other factors that cause results, performance or achievements not to be as anticipated, estimated or intended, including, but not limited to: dependence on obtaining regulatory approvals; investing in target companies or projects that are engaged in activities currently considered illegal under US federal law; changes in laws; limited operating history; reliance on management; requirements for additional financing; competition; hindering market growth and state adoption due to inconsistent public opinion and perception of the medical-use and adult-use marijuana industry and; regulatory or political change.
There can be no assurance that such information will prove to be accurate or that management’s expectations or estimates of future developments, circumstances or results will materialize. As a result of these risks and uncertainties, the results or events predicted in these forward-looking statements may differ materially from actual results or events.
Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements in this news release are made as of the date of this release. The Company disclaims any intention or obligation to update or revise such information, except as required by applicable law, and the Company does not assume any liability for disclosure relating to any other company mentioned herein.