MPX Bioceutical Corporation (MPXEF) signed a letter of intent to acquire all the issued and outstanding shares of private company Canveda Inc., a Licensed Producer under Health Canada’s Access to Cannabis for Medical Purposes Regulations. The Ontario-based Canveda operates a fully built-out facility that is about to begin its first production run and is capable of producing approximately 1,000-1,200 kilograms of high-quality cannabis flower annually.
“We have always considered a Canadian presence to be a critical component of our business strategy,” said W. Scott Boyes, Chairman, President, and CEO of MPX. “While we have never intended to build-out the massive cultivation facilities being constructed by some of the other Canadian Licensed Producers, we will be focussing on utilizing the advanced extraction and distillation processes developed by our U.S. operations to produce and market the MPX-branded, award-winning, concentrates in Canada, commencing with high-quality cannabis oils, followed by the broader range of MPX products as they become permissible under ACMPR rules. We are also excited about the import/export opportunities available to Canadian LP’s.”
According to the statement, MPX will acquire the Canveda Shares for a total purchase price of C$18 million which is comprised of the following: C$15,000,000 satisfied through the issuance of 21,539,261 common shares in the capital of MPX issued at a price of C$0.70 per MPX share, representing the 10-day Volume Weighted Average Price calculated as of the date of the LOI; and the issuance of 6,000,000 common share purchase warrants each exercisable into one (1) MPX Share at an exercise price of C$0.84 for a period of five years from the date of issuance.
MPX stock was lately trading at 72 cents on the OTC Markets, down from the 52-week high of 99 cents, but far above the year’s low of 22 cents.
Mr. Boyes added, “We also expect that this acquisition will accelerate our ability to secure a license to produce in Owen Sound and will be immediately accelerating its development. We intend to replicate, in Peterborough and in Owen Sound and where permitted under Canadian regulations, our U.S. business model of vertical integration which includes production, manufacturing and, eventually, the retailing of our very strong brands to Canadians. We are currently exploring partnerships with potential operators of dispensaries in Western Canada which would provide an additional distribution channel for MPX products.”