Emblem Corp. (TSXV: EMC, OTCBB:EMMBF) (“Emblem”) and GreenSpace Brands (JTR.V) (“GreenSpace”) are pleased to announce a strategic partnership to develop and commercialize cannabidiol (“CBD”) infused health and beauty products for the expected adult-use cannabis market. This groundbreaking partnership unites a highly-regarded consumer packaged goods (“CPG”) company with one of Canada’s most trusted licensed producers of medical cannabis.

The partnership will leverage GreenSpace’s expertise in consumer brand development and distribution to launch products infused with Emblem’s CBD extracts across a number of verticals including beauty, health and wellness, supplements, food and beverage. Each approved product will indicate it is “Powered by Emblem” to signify Emblem’s involvement. Expansion into edibles and consumables using cannabis CBD extracts will move forward when these additional products are permitted under applicable regulations, expected in 2019. Any CBD products will be produced and marketed in accordance with applicable Canadian laws and regulations.

“Emblem’s partnership with GreenSpace Brands is an industry first and represents an incredible opportunity to capitalize on the growing CBD market in Canada,” said Nick Dean, CEO, Emblem Corp. “Through this partnership, we combine GreenSpace’s product innovation and brand building leadership with Emblem’s high-quality cannabis products, licensed manufacturing facility and established distribution channels. Together we aspire to become a market leader in delivering high-quality CBD health and beauty products to Canadians.”

CBD-infused products are a growing consumer trend gaining substantial media attention. CBD is one of the most common cannabinoids in cannabis or hemp that is known for a variety of medicinal qualities without the psychoactive “high” that can be associated with tetrahydrocannabinol (THC). CBD-infused products are part of the large supplements market which reached US$41.4B in the United States in 2016. According to a 2017 report from the Brightfield Group, the hemp-derived CBD market will grow nearly 10-fold to US$1.6 billion between 2016 and 2021.

“Product innovation and strong distribution are core pillars for both GreenSpace and Emblem, making this a perfect partnership for applying GreenSpace’s successful model to the cannabis space,” said Matthew von Teichman, President and CEO, GreenSpace Brands. “This partnership allows us to enter the Health and Beauty category through CBD focused products, which we strongly believe will be a massive category for a long time to come.”

Terms of the partnership
Under the terms of the agreement, GreenSpace will commit to a five-year exclusive CBD supply agreement with Emblem. In addition, Emblem will make a $2 million investment in GreenSpace consisting of $1 million in common shares at a 20-day volume weighted average price of $0.98 per share and $1 million in unsecured convertible debentures to fund the start-up of GreenSpace’s CBD business. The debentures will mature five (5) years from the closing date and will automatically convert into common shares upon the satisfaction of certain conditions (each, a “Milestone”) at a conversion price equal to the lesser of: (i) $1.05; and (ii) the twenty (20) day volume-weighted average price of the common shares on the TSX Venture Exchange (the “Exchange”) on the date the applicable Milestone is achieved, provided that the conversion price shall not be less than $0.94 and that the automatic conversion will be deferred if the market price is less than $0.75 at the time the Milestone is met. Emblem will earn a 4% royalty on all hemp-based CBD product sales and a 7% royalty on all cannabis-based CBD product sales.

In addition to the Emblem investment, GreenSpace has also received a $1 million strategic equity investment from a key supplier who will assist with maximizing commodity purchasing. The investment will be used for general working capital purposes.

The transactions contemplated herein are subject to a number of customary closing conditions, including, but not limited to, Exchange approval.

About GreenSpace
GreenSpace is a Canadian-based brand ideation team that develops, markets and sells premium natural food products to consumers across North America. GreenSpace owns Rolling Meadow Dairy, Canada’s first grass fed dairy business, Life Choices, convenience meat products made with grass fed and pasture raised meats without the use of added hormones and antibiotics, Love Child, a producer of 100% organic food for infants and toddlers made with the purest, natural and most nutritionally-rich ingredients, Central Roast, a clean snacking brand featuring a wide assortment of nut and seed mixes, Kiju, the Canadian market leader in the shelf stable organic juice segment, Cedar, the leaders in the Canadian Cold Press Juice category and the most recently acquired brand, Go Veggie, one of the leaders in the US plant based dairy market. All brands are wholly owned and retail in a variety of natural and mass retail grocery locations across Canada.