Gaia Grow Corp. and Blackhawk Resource Corp. have entered into an agreement dated Feb. 27, 2020, for the purchase and sale of three prelicence retail cannabis stores in British Columbia.
The agreement sets out the terms by which Gaia will acquire all of the issued and outstanding share capital of 1202465 B.C. Ltd. (Nelson store) and Patriot Cannabis Brands Inc. (Powell River stores) from Blackhawk. The Nelson store, located at 306B Victoria St. in Nelson, B.C., currently has an approval in principle (AIP) issued by the Liquor & Cannabis Regulation Branch of British Columbia to operate a cannabis retail store, while the Powell River stores both have applications in process to operate licensed cannabis dispensaries at the premises located at unit No. 3, 4296 Joyce Ave. and 6239 Walnut St. in Powell River, B.C.
“We are extremely excited to announce this transaction,” says Frederick Pels, chief executive officer of Gaia Grow. “We believe these additions could add significant shareholder value and we look forward to updating our investors over the coming quarters as we work to build, grow and monetize these assets.”
The aggregate purchase price for the targets is $1.5-million, which will be satisfied through the issuance of 30 million common shares in the capital of Gaia, at a deemed price per common share of five cents. Blackhawk does not currently hold any securities of Gaia. Upon the issuance of the 30 million common shares, Blackhawk will hold a total of 30 million common shares, representing approximately 12.9 per cent of the issued and outstanding common shares and will become a new insider of Gaia.
The agreement and the proposed transaction are subject to, among other conditions: (i) Gaia being satisfied regarding its due diligence, analysis and other customary examinations related to the financial position of the targets; and (ii) the common shares of Gaia having been conditionally accepted for listing on the Canadian Securities Exchange and having been delisted from the TSX Venture Exchange. The proposed transaction cannot be completed until these conditions, among others, have been satisfied.
Gaia has applied to list its common shares on the Canadian Securities Exchange. Any listing is subject to meeting applicable listing requirements of the CSE and to the common shares being delisted from the TSX Venture Exchange. The listing of the common shares of Gaia has not been accepted by the CSE at this time and there can be no guarantee that the common shares of Gaia will be listed for trading on the CSE. The listing of Gaia on the CSE is not contingent on completion of the proposed transaction and the board of directors of Gaia has resolved to proceed with the listing even if the proposed transaction is not completed.
Mr. Pels and Marc Lowenstein are directors of both Gaia and Blackhawk, however, the proposed transaction is not considered to be a related party transaction within the meaning of Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions. The proposed transaction has been approved by the independent directors of each of Gaia and Blackhawk.
The proposed transaction is not expected to result in a change of control or change of business for Gaia, under the policies of the TSX Venture Exchange or the Canadian Securities Exchange, nor does it represent a fundamental acquisition for Gaia as defined by the policies of the TSX Venture Exchange. The proposed transaction also does not represent a disposition of substantially all of the assets or business undertaking of Blackhawk.
For further information please contact:
Frederick Pels, Chief Executive Officer
Cautionary Note Regarding Forward-Looking Statement
All statements in this press release, other than statements of historical fact, are “forward-looking information” with respect to the Company within the meaning of applicable securities laws, including with respect to the fulfillment of an order for the delivery of COVID-19 testing kits, and anticipated future orders. The Company provides forward-looking statements for the purpose of conveying information about current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. By its nature, this information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. These risks and uncertainties include but are not limited to those identified and reported in the Company’s public filings under the Company’s SEDAR profile at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise unless required by law.