LiveWell Archives - Green Market Report

Debra BorchardtDecember 17, 2018

Tilray, Inc. (NASDAQ: TLRY ) has signed a binding letter of intent (LOI) to purchase hemp-derived CBD isolate from LiveWell Canada Inc. (CSE: LVWL), which will be sourced from the United States and Canada. Hemp CBD is estimated to be a $22 billion market in the U.S. The product will be used for distribution of Tilray-owned wellness and medical products across North America.

LiveWell will supply Tilray with a minimum of 150 kilograms per month of wholesale CBD isolate cultivated and processed from hemp commencing in February 2019, through to July 2019. The amount then increases to a minimum of 300 kg/month for the remainder of the contract, until December 2019. Tilray has the option to increase the amount of CBD supply purchased to 500 kg/month, and there is an additional 12-month renewable option.

“Today’s announcement puts Tilray in a strong position to expand the availability of our products in existing and new potential markets,” says Brendan Kennedy, Tilray CEO. “We’re pleased about the opportunity to increase our capacity to supply high-demand CBD products in Canada.”

The recently passed 2018 Farm Bill in the U.S. presents an opportunity to enter the hemp-derived CBD industry and capitalize on it. The bill needs to be signed by President Trump, which is expected to happen this week before lawmakers leave for the holidays.

“We are pleased to have a strong partner such as Tilray in this emerging market,” said David Rendimonti, President and CEO of LiveWell Canada. “With the legal barriers lifting, we believe the market for hemp CBD could exceed all forecasts because of the huge shift to self-directed care and wellness among consumers.”

Regulations in Canada allow for the use of hemp as a source of CBD, as long as the product satisfies certain quality requirements. These new rules will allow for wholly-owned Tilray Inc. subsidiaries, Tilray Canada Ltd. and High Park Farms Ltd. to potentially utilize hemp-derived CBD to increase the supply of CBD medical and wellness products in Canada.

LiveWell Merger

On December 3, LiveWell signed a binding letter of agreement to merge with Vitality CBD Natural Health Products Inc., one of the largest industrial hemp cultivation and extraction operations in North America, with approximately 20,000 acres harvested in 2018. The merger will bring together the U.S. and Canadian assets to create one of the first fully integrated CBD companies with a production capacity of CBD isolate anticipated to reach 3,000 kilograms per day by mid-2019; research, product development, and GMP manufacturing facilities; international sales and distribution networks; and experienced leadership

William SumnerApril 5, 2018

Canopy Growth Corporation (TWMJF) and Canopy Rivers Corporation announced today that they have executed a strategic agreement with LiveWell Foods Canada Inc., a vertically integrated cannabis company. Under the agreement, Canopy Growth and Canopy Rivers will assist in the development and commercialization of LiveWell’s two cannabis cultivation facilities, located in Ottawa, Ontario, and Litchfield, Quebec.

“This new partnership represents further validation that Canopy is the platform of choice in the cannabis sector,” commented Canopy Growth CEO and Chairman, Bruce Linton. “Canopy has an unmatched ability to collaborate with partners given our breadth of operational knowledge, technology, investment capital, and cultivation expertise.”

To assist in LiveWell’s development, Canopy will provide the company with high-quality cannabis strains for cultivation, assistance with compliance, guidance, and support from trained personnel, and financial and strategic support to assist LiveWell to obtain licenses for its cultivation facilities.

Once licensed, LiveWell’s facilities will have a combined production and processing space of approximately 1.5 million square feet. Additionally, LiveWell will launch its brand through Canopy Growth’s distribution network, including Tweedmainstreet.com, as well as through its retail cannabis dispensary channels.

Subject to the completion of certain milestones, both Canopy Growth and Canopy Rivers will be issued equity in LiveWell. LiveWell has agreed to receive an initial purchase agreement from Canopy for cannabis production at its Ottawa facility. The company also has the option to receive up to $20 million in debt financing from Canopy Rivers for continued growth.

“Partnering with Canopy Growth and Canopy Rivers, the leaders in the cannabis industry, provides LiveWell with the best in class partners required to execute on our ambitious growth plans in an efficient and expedited manner,” said LiveWell CEO Seann Poli. “Having access to their operational excellence, unique technology, global distribution infrastructure, and an abundance of other industry insights, we can significantly de-risk the execution and operation of both facilities. These significant executional efficiencies will drastically reduce our time to market and improve the quality of the product we deliver.”

Stock Performance

There are four analysts covering this stock according to Yahoo! Finance with an average price target of the stock on the Toronto Exchange of C$35.40. That stock is trading at C$28.07, down from its 52-week high of C$44.00. The OTC Marketplace stock lastly traded at $21.97 down from its 52-week high of $35.88.