VANCOUVER, April 29, 2019 /CNW/ - Zenabis Global
Inc. (TSXV:ZENA) ("Zenabis" or
the "Company") is pleased to announce that it has
entered into a binding term sheet for a three-year supply
arrangement with leading German pharmaceutical research company
Farmako GmbH ("Farmako") for: (1) the supply of
biosynthetically produced pure CBD isolate oil (99.9%) from Farmako
to Zenabis for sale in Canada; and
(2) the supply of European Union Good Manufacturing Practices
("EU GMP") certified cannabis cultivated in Zenabis' indoor
facilities in Canada for sale by
Farmako to the German medical market.
Andrew Grieve, Chief Executive
Officer of Zenabis, stated, "While Zenabis is committed to
producing both hemp- and cannabis-derived CBD products, we are
thrilled to have signed the very first commercial agreement
globally of its kind for the purchase of biosynthetic
cannabinoids. We are purchasing the CBD isolates from Farmako
at an incredibly low cost, which will allow us to tap into the
rapidly growing Canadian CBD market by supplying products that will
be priced much more competitively than current market
offerings. This partnership will also enable Zenabis to supply
high-quality medical cannabis into Germany, one of the largest medical cannabis
markets in the world, thereby establishing our position in the
European cannabis market."
Farmako founder and chief executive officer, Niklas Kouparanis,
said, "Signing the first deal in history to sell
mass-produced CBD isolate created by biosynthesis to Zenabis is a
significant milestone for both Farmako and for the global Cannabis
industry. Being the first European company to enter into an
agreement to sell CBD isolates to the Canadian market puts Farmako
at a significant competitive advantage within the global market and
also supports us in bridging the gap between cannabis and
pharmaceuticals. With our unique Continuous Bacterial Cannabinoid
Biosynthesis (CBCB) method using our patented Bacterium
Zynmomonas Cannabinoides®, we are able to produce
nature-identical cannabinoids very effectively and at very low
costs on a large scale."
Highlights of CBD Isolate Agreement
- Subject to Farmako's production capacity, Farmako will supply
Zenabis with 36,000 kg of CBD isolate over a three-year period,
commencing in Q4 2019.
- If Farmako and Zenabis are able to obtain EU export and
Canadian import licenses for both the recreational and medicinal
markets in Canada, then Farmako
will supply the CBD isolate from its facility in Germany. If
such licenses are not available, Farmako will construct a
bioreactor at one of Zenabis' existing licensed facilities in
Canada.
- Zenabis will offer the product through its Canadian medical and
recreational brand distribution channels as well as in bulk for
manufacturing purposes to other licensed producers. Zenabis will
also have a right of first refusal to purchase any additional CBD
isolate produced by Farmako for sale in the Canadian market.
- Zenabis will pay Farmako an amount equal to Farmako's marginal
cash cost of production and will then split Zenabis' profits from
the sale of the product with Farmako (50% to Farmarko if the profit
exceeds a specified threshold, otherwise 60% to Farmako).
- Mr. Kouparanis continued, "In contrast to other biosynthetic
methods, Farmako does not use yeast but a genetically modified
tequila bacterium for CBD production. Our CBCB method has
considerable advantages over other biosynthetic production methods,
as it can produce pure CBD or other cannabinoid with extremely high
levels of purity at a mass scale and at costs that are far below
the current market price."
Highlights of Cannabis Agreement
Subject to Zenabis fulfilling EU GMP certification requirements,
Zenabis will supply Farmako with up to 5,000 kg per year of indoor
EU GMP certified cannabis for the medical
market. Shipments are expected to commence in Q4 2019
and will include, but not be limited to, dry flower, soft gels and
sublingual sprays.
Germany's medical cannabis laws
were introduced in March 2017 and the
country is poised to become one of the largest federally regulated
medical cannabis markets in the world. Without domestic production,
the country must import supply to meet rapidly growing demand and
Zenabis is now positioned to secure market share through its supply
arrangements with Farmako.
About Farmako GmbH
Farmako GmbH is a research-based pharmaceutical company based in
Frankfurt. The
company focuses on the distribution of pharmaceutical cannabis
and research in order to catch up on the research backlog in the
field of pharmaceutical cannabis. Farmako plans to become a
vertically integrated market leader in every European country in
this market with the appropriate legal basis. Farmako has branches
in Germany, Denmark and the United Kingdom. After its market entry in
March 2019, Farmako already is one of
the leading independent European distributors for pharmaceutical
cannabis.
About Zenabis
Zenabis is a Canadian publicly listed licensed cultivator of
medical and recreational cannabis. The Company was formed in
January 2019 through the combination
of Bevo Agro Inc., one of the largest propagation businesses in
North America; and Sun Pharm
Investments Ltd., a large privately held licensed cannabis producer
with established medical and recreational cannabis brands and
distribution. The Company owns six state-of-the-art indoor and
greenhouse facilities across Canada, four of which are intended for
cannabis cultivation. If all four such facilities are fully
built out and converted to cannabis production, they would have a
design capacity to yield approximately 479,300 kg of dried cannabis
annually. The remaining two facilities are currently generating
revenue in the propagation and floral business and have applied for
industrial hemp cultivation licenses.
The Company benefits from a management team that has growing
expertise developed over 30 years in one of the largest plant
propagation businesses in North
America, as well as extensive sales, marketing and
distribution experience. These strengths have been key to
Zenabis' success in securing supply agreements and arrangements
with eight Canadian provinces and one territory, where the
Company's recreational products are sold both online and in store
through government-owned cannabis stores. In addition, the Company
has signed agreements with Pharmasave and Shoppers Drug Mart to
supply products to their medical customers.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in policies
of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release.
Forward Looking Information
This news release contains statements that may constitute
"forward-looking information" within the meaning of applicable
Canadian securities legislation. Forward-looking information may
include, among others, statements regarding the future plans,
costs, objectives or performance of Zenabis, or the assumptions
underlying any of the foregoing. In this news release, words such
as "may", "would", "could", "will", "likely", "believe", "expect",
"anticipate", "intend", "plan", "estimate" and similar words and
the negative form thereof are used to identify forward-looking
statements. In this news release, forward-looking statements
relate, among other things, to: our partnership with Farmako and
the expected benefits resulting therefrom, the satisfaction of
conditions to the supply arrangement, including the obtaining of EU
GMP certification for our facilities in Delta, British Columbia and Atholville, New Brunswick, the execution of
the obligations under the binding term sheet, our intention to
enter international cannabis markets, and expectations with respect
to international cannabis markets.
Forward-looking statements should
not be read as guarantees of future performance or results, and
will not necessarily be accurate indications of whether, or the
times at or by which, such future performance will be achieved. No
assurance can be given that any events anticipated by the
forward-looking information will transpire or occur.
Forward-looking information is based on information available at
the time and/or management's good-faith belief with respect to
future events and are subject to known or unknown risks,
uncertainties, assumptions and other unpredictable factors, many of
which are beyond Zenabis' control. These risks, uncertainties and
assumptions include, but are not limited to, those described in the
Company's shelf prospectus dated April 9,
2019, a copy of which is available on SEDAR at
www.sedar.com, and could cause actual events or results to differ
materially from those projected in any forward-looking statements.
Furthermore, any forward-looking information with respect to
available space for cannabis production is subject to the
qualification that management of Zenabis may decide not to use all
available space for cannabis production, and the assumptions that
any construction or conversion would not be cost prohibitive,
required permits will be obtained and the labour, materials and
equipment necessary to complete such construction or conversion
will be available. Accordingly, readers should not place undue
reliance on the forward-looking statements and information
contained in this news release. Zenabis does not intend, nor
undertake any obligation, to update or revise any forward-looking
information contained in this news release to reflect subsequent
information, events or circumstances or otherwise, except if
required by applicable laws.
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For more information, visit: https://www.zenabis.com.
SOURCE Zenabis Global Inc.