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UK: Extension of letter of intent with Canmart

Halo Labs has agreed to a second extension of the binding letter of intent to acquire all of the common shares of Canmart Limited, a licensed importer and distributor of cannabis-based products for medicinal use. Due to the ongoing global COVID-19 pandemic, the Company has agreed to the extension to allow both parties adequate time to complete due diligence and negotiate the definitive agreements while under shelter-in-place restrictions.

The total transaction size of the Canmart acquisition is anticipated to be C$6 million, payable in Halo common shares and at a deemed price of C$0.35 per share, which is based on the 30-day VWAP as of December 23, 2019, the day the LOI was originally executed ("the Consideration"). The total Consideration will be paid periodically as Canmart achieves critical business milestones. The LOI has been extended for an additional 60 days to June 21, 2020.

Transaction Highlights
Halo to acquire 100% of Canmart Limited, a fully licensed operatorCanmart is one of the UK’s few late-stage applicants for a Controlled Drugs License to import and distribute licensed Cannabis-Based Products for Medicinal use ("CBPMs"). "This intended acquisition of Canmart will position Halo as a seed to sale importer and distributor of medical cannabis in the United Kingdom. Canmart operates a licensed 25,000 square foot third party logistics warehouse in the southeast of England," the team with the company explains.

"Although Medical cannabis has been legal in the UK since November 2018, sizeable growth is anticipated, particularly for imported productsThe UK imports 100% of its CBPMs for domestic use
Estimated 1.4 million British citizens currently directly purchase CBPMs to treat chronic health conditions from unregulated channels
Substantial growth potential for CBPMs through the National Health Service ("NHS"), as improved medical guidelines are adopted, and the market becomes better regulated."

"Canmart already holds wholesale distribution and special licenses, issued by the MHRAIt also has applied for a Controlled Drugs License from the Home Office, to import and distribute licensed CBPMs
The Home Office is the government department responsible for the enforcement of cannabis legislation in the UK and has recently completed an initial site visit to Canmart’s warehouse facility to assess its suitability and security arrangements"

"Halo still anticipates commencing export of CBPMs to the UK in 2020 from Bophelo, subject to approval from the Medicines and Healthcare products Regulatory Agency ("MHRA") and any other necessary regulatory approvals. Halo believes the UK cannabis market will be an attractive investment. The legal cannabis industry in the UK is in its earliest stages. According to Prohibition Partners, a leading market research group for the international cannabis market, there are approximately 7.3 million people in the UK who buy CBD products each year from online retailers and high-street stores. Further the country has 4.7 million recreational cannabis users and 1.4 million people who use CBPMs to treat chronic health conditions. Those using CBPMs in this way are currently purchasing them through unregulated channels."

For more information:
Halo Labs    

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