CBi2, 51st Parallel Combine To Form LivWell International With Canadian Rights To Willie's Reserve

Target Capital Inc. d.b.a. CBiCapital (TSXV: TCI) and 51st Parallel Inc. have combined forces to become LivWell International Corp. The Calgary-based LivWell International will be listed on both the CSE and TSXV. The new company will be focused on cultivation, processing and extraction, retail operations, and the execution of an aggressive cannabis-brand acquisition, licensing and development strategy.

As a part of the deal, 51st Parallel is making a $20 million investment in Denver-based GCH, Inc., which will give the company exclusive Canadian licensing rights to GCH’s flagship brand Willie’s Reserve and Willie’s Remedy. The products license the name of country and western star Willie Nelson who is known for being an avid cannabis consumer. LivWell will also get the first option for any additional Willie products.

“We are excited about this transaction with CBi2 and 51st Parallel,” said John Lord, Chairman, and CEO of LivWell. “The upcoming federal legalization of the Canadian cannabis market provides a unique opportunity to leverage our ten years of operational expertise and expand the full suite of LivWell brands across Canada and internationally. We look forward to creating a successful, high-growth business and delivering value for both our customers and shareholders.”

Management Team

According to the company statement, LivWell International will be led by the existing management team of LivWell Enlightened Health: John Lord (Chairman and CEO), Dean Heizer (Executive Director), Michael Lord (Chief Operating Officer), Todd Oltmans (Manager of Construction and Facilities), Nate Fate (Manager of Cultivation and Production) and Dakeana Jones (Manager of Human Resources). Joining LivWell’s team will be David Cheadle as LivWell International’s VP Finance and Chief Financial Officer and Sony Gill as Corporate Secretary.

Upon completion of the business combination involving CBi2 and 51st Parallel, LivWell International’s board of directors will be comprised of the following professionals: John Lord, Dean Heizer, Andy Williams (Co-founder and Chairman of Medicine Man Technologies Inc.), Jason Kujath (Co-founder and President of 51st Parallel) and Ron Hozjan (VP Finance and CFO of Tamarack Valley Energy Ltd.).

In connection with the GCH Transaction, Sonny Mottahed, Chairman, President, and CEO of CBi2 and CEO and a director of 51st Parallel, will join the board of directors of GCH.

“This is a highly transformative transaction for our company and our shareholders. The LivWell team is recognized as the most accomplished operator in the global cannabis industry, bringing the experience and knowledge needed to position LivWell International to compete with other industry leaders,” said Sonny Mottahed, Chairman, President, and CEO of CBi2 and CEO and a director of 51st Parallel. “The investment into GCH, the owner of Willie’s Reserve, represents the beginning of a broader brand strategy to augment our existing retail and distribution plans.”

Terms

According to the company, each common share of 51st Parallel will be exchanged for common shares of CBi2  on the basis of a deemed value of $0.11 per CBi2 Share and CBi2 and 51st Parallel will be amalgamated to form LivWell International. In conjunction with the closing of the Transaction, 51st Parallel has entered into an agreement with a syndicate of investment dealers led by Eight Capital and including Cormark Securities Inc., Canaccord Genuity Corp., AltaCorp Capital Inc. and Atlas Capital for a brokered private placement offering of subscription receipts of 51st Parallel at an issue price to be determined in the context of the market on a best efforts agency basis for aggregate gross proceeds of up to $50.0 million. The Financing is expected to close on or about August 21, 2018. Each Initial Subscription

Debra Borchardt

Debra Borchardt is the CEO, Co-Founder, and Editor-In-Chief of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Masters degree in Business Journalism from New York University.


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