Emerald
Health Therapeutics, Inc. (“Emerald”) (TSXV:EMH; OTCQX:EMHTF) is
pleased to announce that, further to its news releases dated April 17,
2018 and November 19, 2018, it has closed its 51:49 joint venture (the
“Joint Venture”) with San Diego-based Emerald Health Bioceuticals
(“EHB”), called Emerald Health Naturals (“EHN”).
Emerald
has invested $5,000,000 for 51% equity ownership of EHN. EHB has
granted EHN the exclusive Canadian distribution rights to EHB’s
award-winning product line in exchange for 49% equity ownership of EHN.
EHB’s product line consists of nutritional supplements that use
non-cannabis, non-psychoactive plant-based bioactive compounds to
support the body’s endocannabinoid system.
Market
research commissioned by the Company identified that approximately 60%
of legal cannabis users also use natural health products. This strong
consumer overlap between the two markets is expected to create a unique
opportunity for Emerald to build its health brand through EHN and begin
sales of endocannabinoid-supporting products in natural health product
channels. These channels are not authorized to sell cannabis under the
Canadian federal cannabis regulations for recreational use which came
into force on October 17, 2018. However, if these channels are approved
in the future, the Company expects to be well positioned to introduce
its cannabis-based products into these channels.
The formation of the Joint Venture is a “related-party transaction” as such term is defined in Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions
(“MI 61-101”) as EHB is approximately 71% owned by Emerald Health
Sciences Inc., which is also the holder of approximately 30.6% of the
outstanding common shares of the Company. The Company is relying on the
exemption from the formal valuation requirements of MI 61-101 set out in
Section 5.5(b) of MI 61-101 and the exemption from the minority
shareholder approval requirements of MI 61-101 set out in Section 5.7(a)
of MI 61-101 in respect to the creation of the Joint Venture.
In
connection with the formation of the Joint Venture, EHN has also
acquired the assets of GAB Innovations (“GAB”) and has granted
non-exclusive sub-distribution rights to Avricore Pharmaceuticals Inc.
(formerly VANC Pharmaceuticals Inc.) (“Avricore”). Both GAB and Avricore
have established networks and a history of sales success in the natural
health product and pharmacy channels. Gaetano Morello, ND, the founder
of GAB, has been appointed CEO of EHN.
Emerald
also announces that Chris Wagner has resigned as a director of the
Company. As previously announced, Mr. Wagner stepped down as CEO
effective November 28, 2018. Mr. Wagner will continue to act as a
consultant to Emerald and provide assistance when needed.
About Emerald Health Therapeutics, Inc.
Emerald
Health Therapeutics, Inc. is a Canadian licensed producer of cannabis.
Its 50%-owned Pure Sunfarms joint venture in BC is completing the
conversion of its 1.1 million square feet (25 acre) greenhouse for
cannabis cultivation in the Lower Mainland and its Agro-Biotech
operation in Québec is completing its 75,000 square feet indoor
facility. Commercial production is expanding in both facilities. In
addition, Emerald secured over 500 acres of hemp harvest in 2018 and has
contracted for approximately 1000 acres in 2019 to 2022, with the
objective of extracting low-cost cannabidiol. Emerald’s team is highly
experienced in life sciences, product development, large-scale
agri-business, and marketing, and is focused on developing proprietary,
value-added cannabis products for medical and adult-use customers.
Emerald is part of the Emerald Health group, which represents a broad
array of companies focused on developing pharmaceutical, botanical, and
nutraceutical products developed to provide wellness and medical
benefits by interacting with the human body’s endocannabinoid system.
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