Organigram Holdings Inc. (TSX VENTURE: OGI) (OGRMF) (“Organigram“), a leading licensed producer of medical marijuana based in Moncton, New Brunswick , is pleased to announce that it has entered into a letter of intent with Hyasynth Biologicals, Inc. (“Hyasynth“) whereby Organigram proposes to make a strategic investment in Hyasynth. Additionally, the non-binding letter of intent contemplates Organigram entering into an off-take agreement with Hyasynth whereby Organigram can purchase a pre-defined quantity of a range of cannabinoids or cannabinoid related production from Hyasynth on terms set forth in such agreement.
Hyasynth, a biotechnology company based in Montreal , is a leader in the field of phytocannabinoid science and biosynthesis. Their patent-pending technology makes it possible to produce phytocannabinoids using genetically engineered strains of yeast. Fermentation is a well-established and scalable production method for many nutritional products and pharmaceuticals. Hyasynth’s proprietary enzymes and yeast strains allow them to apply this efficient manufacturing platform to CBG, CBD and THC for novel and specialized products, and as pharmaceutical ingredients. Hyasynth previously demonstrated small-scale production of phytocannabinoids under a research exemption. They recently received their dealer’s license from Health Canada, which enables them to expand beyond research and into commercial production.
Pursuant to the terms of the strategic investment, once finalized, Organigram will have the right to purchase up to $10 million in senior secured convertible debentures (the “Debentures“) of Hyasynth in a series of three tranches based on Hyasynth attaining certain milestones in respect of tranches two and three. Upon the occurrence of certain conversion triggers, the outstanding indebtedness under the Debentures would be in whole or in part converted into equity shares of Hyasynth. If fully converted, the shares would represent a substantial interest in Hyasynth based on the current capitalization structure for Hyasynth, provided that such capitalization structure remains as such at the time of conversion. Additionally, subject to a successful closing, Organigram will be granted certain investor rights and board representation. Organigram will be granted a floating security interest over the assets of Hyasynth so long as there is indebtedness outstanding under the Debenture(s).
Greg Engel , CEO of Organigram, commented, “As a proven technology the use of bioreactors is an infinitely scalable process which should allow Hyasynth to produce pharmaceutical grade cannabinoids at a significantly lower cost than traditional plant-based production, which has numerous medical and adult recreational use applications. the funding provided by Organigram will allow Hyasynth to refine and optimize its processes at scale via a contract manufacturer as well as fund a purpose-built manufacturing facility for production and also provides Organigram with the ability to purchase up to 25% of the cannabinoids produced by Hyasynth.”
“We are pleased to work in tandem with Hyasynth” Engel continued, “as this proposed strategic investment represents another synergistic partnership to further bolster Organigram’s range of offerings – with a particular view to the future of cannabinoid products to the growing global market.”