Emblem Corp. (EMMBF) Signs Letter of Intent to Acquire Natura Naturals

Emblem Corp. (EMC.V) (EMMBF) (“Emblem” or the “Company”), announced today that it has signed a non-binding Letter of Intent (“LOI”) to acquire all of the issued and outstanding securities in Natura Naturals Inc. (“Natura”) that it does not already own for $25 million in cash, $12.5 million in mortgage financing and 26,102,941 common shares of Emblem (the “Transaction”). Based on Emblem’s 45 day VWAP of $1.36, the implied transaction value is $76 million (inclusive of Natura shares already owned by Emblem). On completion of the Transaction, Emblem will further its aggressive approach to sales growth both domestically and internationally backed by robust supply from the Natura greenhouse.

Based in Leamington, Ontario, Natura operates a 662,000 sq ft licensed greenhouse that is currently undergoing a phased conversion and retrofit that is expected to bring up to 15,000 kg of annualized cannabis production online in 2018. Once completed in 2019, the facility is expected to bring total annualized cannabis production capacity to approximately 70,000 kg per year.

The entering into of the LOI follows Emblem’s recently announced $3 million equity investment in Natura and the entering into of a 3,000 kg per year supply agreement.

“Through the due diligence process of investigating Natura as a supply partner, we uncovered significant synergies between the two organizations” said Nick Dean, CEO of Emblem Corp. “Providing high quality products to Emblem’s medical and adult-use audiences continues to be our top priority. With the added capacity from Natura, we are able to aggressively pursue our focus on product innovation, building great brands and finding distribution partners domestically and internationally.”

With more than 40 years of greenhouse production expertise, Natura will bring a wealth of expertise and talent to Emblem’s production side, with the capacity to produce high-quality, greenhouse-grown cannabis at a lower cost than an indoor facility. Natura will also bring 32 proprietary cannabis strains to Emblem’s library, significantly increasing Emblem’s intellectual property.

Emblem currently has supply agreements with Shoppers Drug Mart nationally, the Alberta Gaming and Liquor Commission, and has an LOI to form a joint venture with German pharmaceutical wholesaler Acnos Pharma GmbH. Emblem also has submitted an application to supply the Ontario Cannabis Stores in Ontario. Under Emblem’s portfolio, it is expected that Natura will be a stand-alone brand in the adult-use market, joining Symbl, Emblem’s recently launched recreational brand.

The final terms and closing of the Transaction is subject to the negotiation and execution of a definitive agreement and certain other customary conditions including the receipt of all necessary regulatory approvals.  The Transaction is expected to close in the third quarter of 2018.

In light of the Transaction, Emblem has made the decision to suspend greenhouse construction plans at their Paris Road location. The construction of Emblem’s GMP certified lab located at their Woodslee location will continue with an anticipated completion date of December 2018.

About Natura Naturals
Based in Leamington, Ontario, Natura Naturals is a  licensed cultivator of medical cannabis pursuant to Health Canada’s Access to Cannabis for Medical Purposes Regulations (“ACMPR”). The company’s cultivation facility is capable of producing plants in a 662,000+ square feet greenhouse facility under optimal growing conditions. Natura  grows high-quality hydroponic cannabis which can be used for various medical and recreational applications. Natura has an extensive genetics library and continues to develop innovative products for the Canadian and International marketplace.

About Emblem
Emblem, through its wholly-owned subsidiary Emblem Cannabis Corporation, is a fully integrated licensed producer and distributor of medical cannabis and cannabis derivatives in Canada under the ACMPR. Emblem’s state-of-the-art indoor cannabis facility and research and development laboratory is located in Paris, Ontario. Led by an experienced management team of healthcare executives, accomplished marketing professionals, and cannabis experts, Emblem is focused on driving shareholder value through product innovation, brand relevance, and access to patient and consumer channels. Emblem is also the parent company of GrowWise Health Limited, one of Canada’s leading cannabis education services. Emblem trades under the ticker symbol EMC on the TSX Venture Exchange.