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CannaRoyalty to Acquire 20% of Anandia Labs, a Leader in Cannabis Testing, Extraction and Genetics

Published on Monday, January 09, 2017

Cannabis genetic testing venture

OTTAWA, ONTARIO–(Marketwired – Jan. 9, 2017) - CannaRoyalty Corp. (CSE:CRZ)(CRZ.CN) is pleased to announce the signing of a letter of intent (“LOI”) to acquire a 20% equity interest in Anandia Laboratories Inc. Anandia Labs is a cannabis biotechnology company with a focus on providing leading analytical testing services and developing cannabis strains for safe and effective medical applications.

Anandia Labs has completed extensive research into cannabis genetics and has built a significant intellectual property position that includes cannabinoid pathway patents. The company uses genomics and modern plant breeding approaches to develop innovative, new products and next generation cannabis varieties.

Anandia Labs has also been issued a Health Canada Dealers License pursuant to the provisions of the Controlled Drugs and Substances Act and the Narcotic Control Regulations. The Dealers License permits Anandia Labs to analyze and extract cannabis, and cultivate cannabis for breeding and strain improvement. This licensing gives Anandia Labs the ability to undertake research and development, and develop products beyond those currently permitted for Licensed Producers under Health Canada’s Access to Cannabis for Medical Purposes Regulations (ACMPR).

Anandia Labs is also a leader in independent cannabis testing and analytical services which are currently being used by seven Licensed Producers under the ACMPR. The recently released Report of the Task Force on Cannabis Legalization and Regulation emphasized the importance of independent lab testing of all cannabis products.

Dr. Jonathan Page, Co-Founder, President and CEO of Anandia Labs, and an internationally-recognized pioneer in cannabis genetics, stated, “We have elected to partner with CannaRoyalty given their expertise in extraction, post-processing and the development of proprietary formulations. The recent Task Force report described analytical testing as the ‘cornerstone’ for ensuring safe and effective products in the future cannabis market. Building on our analytical chemistry expertise, our objective is to leverage our Dealers License to build a national, best-in-class cannabis extraction and processing facility.”

Marc Lustig, CEO of CannaRoyalty, commented, “Our partnership with Anandia Labs exemplifies our approach of acquiring interests in high-value, strategic assets in the North American cannabis sector. As the only independent Canadian testing facility specializing exclusively in cannabis, Anandia Labs is clearly well positioned given how crucial independent testing of cannabis products is to the future of the cannabis sector in Canada. In addition, the value that we expect to help create through Anandia Labs’ Dealers License for the extraction of derivatives – together with Anandia’s impressive patent portfolio of genetics – gives CannaRoyalty shareholders exciting exposure to rapid and sustainable growth areas in Canada’s dynamic cannabis sector.”

Under the terms of the LOI, CannaRoyalty has agreed to provide aggregate consideration of C$4,000,000 in exchange for a 20% equity interest in Anandia Labs, which will be satisfied through a combination of $500,000 in equipment and services to be provided by CannaRoyalty; C$1,500,000 in cash; and the balance in common shares of CannaRoyalty (“CR Shares”) at a deemed price per CR Share equal to the lesser of (a) C$3.10 being the closing price of the CR Shares on January 6, 2017, the last trading day prior to this announcement, and (b) the volume weighted average price of the CR Shares on the Canadian Securities Exchange for the 10 consecutive trading days immediately preceding the date of closing (the “Closing”). The Closing is expected to be on or prior to January 31, 2017, subject to, among other things, (i) satisfactory completion of financial and legal due diligence by the parties; (ii) the execution of final definitive documents acceptable in form and substance to the parties (the “Definitive Documents”); (iii) the approval of each of the board of directors of each of the parties to the transaction and the Definitive Documents; and (iv) the satisfaction or waiver of all conditions to closing specified in the Definitive Documents.