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Agreement to set up a joint venture company in Canada
VANCOUVER, British Columbia – May 30, 2019 /Canna Newswire/ – Benchmark Botanics, Inc. (CSE: BBT) (FSE: BBW) (OTC: BHHKF) ("Benchmark", "BBT" or the "Company") a federally-licensed producer and distributor of medical-grade cannabis, is pleased to report that it has signed a definitive agreement with China-based Zhejiang Yatai Pharmaceutical Co., Ltd. ("Zhejian Yatai "), a publicly listed company on the Shenzhen Stock Exchange (stock code: 002370), to set up a joint venture company in Canada.
Subject to compliance with relevant Canadian Cannabis Laws, the new company will explore business opportunities in the Cannabis industry to become involved in cultivation, manufacture, processing, and marketing of high cannabidiol ("CBD") cannabis products; in the cultivation and R&D of medical cannabis; and in the extraction, isolation, and purification of high-CBD cannabis oil for commercial applications. This definitive agreement solidifies the terms of the Letter of Intent of Strategic Cooperation between Benchmark and Zhejian Yatai, which was reported in a news release on May 7, 2019.
"This agreement with Zhejiang Yatai is a significant milestone for Benchmark Botanics," said William Ying, CEO of Benchmark Botanics. "Zhejiang Yatai is a Top 500 Chinese corporation and is a leader and an innovator in the pharmaceutical industry. Benchmark is the perfect partner to take Zhejiang Yatai's drug research and development, production and sales in the pharmaceutical field and synergize with Benchmark's expertise in cannabis cultivation and extraction."
On May 27, 2019, the companies signed the definitive investment cooperation agreement, whereby the parties agreed to set up the new joint venture company in Canada. The new company will have a share capital of $14 million CAD, of which Zhejiang Yatai will invest $7 million CAD cash, accounting for 50% of the new company's share capital; BBT will cause its wholly-owned subsidiary Potanicals Green Growers Inc. ("PGG") to use its existing Health Canada issued license to apply for a license for property to be acquired by the new company (the "Facility") for cannabis cultivation, processing, and sale thereon and in exchange BBT will receive 25% of the new company's share capital (with a cash equivalent of $3.5 million CAD); and Rippington Investment ("RI") will invest $3.5 million CAD, accounting for the remaining 25% of the new company's share capital.
Objective of the Agreement
The objective of the Investment Cooperation Agreement is to explore business opportunities in the Cannabis industry, subject to compliance with Canadian Cannabis and Hemp Regulations and Act, to become involved in cultivation, manufacture, processing, and marketing of high CBD (cannabidiol) cannabis products; the cultivation and R&D of medical cannabis; and the extraction, isolation, and purification of high-CBD cannabis oil for commercial; and any other activities as approved by the Board of Directors. Future products from the joint venture company may also be marketed, sold and distributed in countries and jurisdictions where cannabis products are legal.
Primary Components of the Joint Venture
The company name will be YATAI & BBT Biotech Ltd.
A limited liability corporation is to be established pursuant to the laws and regulations of Canada with the company's first issue of 14 million shares will be made as follows:
Yatai Pharmaceutical will purchase 7,000,000 shares for $7,000,000 CAD, representing 50% of the initial issued shares. The contributions will be made in two stages. In the first stage Yatai Pharmaceutical will contribute $4 million CAD and in second stage Yatai Pharmaceutical will contribute $3 million CAD.
BBT will receive 3,500,000 shares, representing 25% of the initial issued shares, by causing PGG to use its existing Health Canada issued license to apply a license for the Facility for cannabis cultivation, processing, and sale. The shares will be issued at the time of the joint venture company's incorporation.
RI will purchase 3,500,000 shares for $3,500,000 CAD, representing 25% of the initial issued shares. The contributions will be made in two stages. In the first stage RI will contribute $2 million CAD and in second stage RI will contribute $1.5 million CAD.
The company's business scope will be to explore business opportunities in the cannabis industry, subject to compliance with the Canadian cannabis legislation and regulations, promote high content of CBD industrial hemp cultivation, cultivation, processing, marketing and medical cannabis cultivation, research and development and high purity CBD-based cannabinoid extraction, separation, purification and commercialization of multi-field applications and other activities to be determined by the company.
The joint venture company will make full use of the existing resources and the company's experience in the field of drug development, promote the cultivation of high content of CBD industrial hemp cultivation, processing, marketing, research and development of medical cannabis and high purity CBD-based cannabinoids extraction, separation, purification and development.
"We are extremely happy to have signed this agreement with Benchmark Botanics and look forward to capitalizing on the medical applications of CBD. We are delighted to have partnered with a quality organization that shares the same standards as well as a philosophy rooted in science to produce unique, safe, and quality products," said Mr. Chen, Chairman of Yatai Pharmaceutical." We will utilize all of our expertise and resources to maximize our efforts to build the company's value and a long-term successful joint venture."
The definitive agreement filings will be available on SEDAR.
About Zhejiang Yatai Pharmaceutical Co., Ltd.
Zhejiang Yatai Pharmaceutical Co., Ltd. (http://en.yatai.com/), a publicly listed company on the Shenzhen Stock Exchange (stock code: 002370) is a China-based company engaged in the manufacture and distribution of drugs. The Company's main business consists of the research, development, production and sales of chemical agents, chemical raw materials and diagnostic reagents, as well as the provision of pharmaceutical research and development outsourcing (CRO) services. The Company's chemical agents are classified as antibiotics and non-antibiotic drugs. Along with its subsidiaries, the Company provides preclinical research services, clinical research services and other advisory services. The Company distributes its products primarily in domestic markets and overseas markets.
ON BEHALF OF THE BOARD OF
BENCHMARK BOTANICS INC.
/s/ "William Ying"
Chief Executive Officer
About Benchmark Botanics Inc.
Benchmark Botanics is a diversified multi-licensed cannabis producer focused on a three-way vertical business model targeting the medical, pharmaceutical, and recreational markets in Canada and the EU. The Company's business plan also includes a strategy to become a Canadian licensed producer to pioneer selling medical cannabis and hemp in China and throughout Asia.
Benchmark Botanics is focused on producing the highest-quality, indoor-grown cannabis for patients and adult recreational consumers, as well as developing international business partnerships to extend the Company's global footprint.
# CNW #
David Joseph Marketing
+1 (604) 619-9192
Post date: 2019-05-30 13:04:22
Post date GMT: 2019-05-30 20:04:22
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