Business
Golden Leaf Holdings Announces the Sale of its Canadian Operations While Maintaining the Right to Sell Chalice Farms Products in Canada
Golden Leaf Holdings Announces the Sale of its Canadian Operations While Maintaining the Right to Sell Chalice Farms Products in Canada.
About this update from Chalice Brands Ltd.
[{"type":"text","content":"\n TORONTO, Jan. 06, 2020 (GLOBE NEWSWIRE) -- Golden Leaf Holdings Ltd. (CSE: GLH) (OTCQB: GLDFF) (“Golden Leaf” or the “Company”), a pioneering cannabis solutions company and dispensary operator built around the recognized brands of Chalice Farms, is pleased to announce that it has sold its two Canadian subsidiaries, Medical Marihuana Group Corporation (“MMG”) and Medical Marijuana Group Consulting Ltd. (“MMC,” and together with MMG, the “Canadian Operations”), to Sensi Brands Inc. (“Sensi Brands” or “Purchaser”), a global cannabis consumer packaged goods company. The Canadian Operations were sold for aggregate consideration of C$3,400,000, including the assumption of outstanding mortgage debt of C$400,000. In addition to all the issued and outstanding shares of MMG and MMC, the Purchaser acquired certain amounts receivable by the Company from MMG and MMC. The consideration was composed of C$1,800,000 in cash received at closing, C$200,000 in an unsecured loan, and C$1,000,000 in a secured vendor take-back loan. The Purchaser assumed a C$400,000 note issued by MMG and held by an arm’s length lender secured by a first mortgage over the real property of the Canadian Operations. The transaction closed on December 31, 2019. In parallel, the Board of Directors of MMG has approved a strategic shift whereby management will place more focus on what is thought to be more attractivee markets in the United States, where existing operations have demonstrated more favorable cash flows.  MMG recorded zero sales in the third quarter of 2019 and consumed nearly C$475,000 of cash during this time. Turning attention to the U.S. aligns with the Company’s “crawl, walk, run” mantra, and will enable the Company to continue to validate its business plan and revenue streams prior to making additional, and more significant, capital investments to generate further positive returns.  With the sale of MMG and MMC to Sensi Brands, GLH was able to strengthen its cash position while maintaining the right to sell its Chalice Farms products in Canada upon receipt of Health Canada approvals.  As part of the transaction, GLH anticipates entering into a royalty agreement with Sensi Brands to market and distribute its Chalice Farms products to...