WeedMD has signed and closed a definitive agreement to sell its subsidiary Starseed Medicinal Inc., which had been operating out of the production facility located on Bennett Road North in Bowmanville, Ontario, to Final Bell Canada Inc. (the “Purchaser”) for C$2.5 million in cash. Starseed Medicinal Inc. is the license holder for the Bowmanville Facility, which is licensed by Health Canada under the Cannabis Act (Canada) for cultivation, processing and sale of dried cannabis and cannabis extracts, and to conduct research. Net proceeds of the sale will primarily be used by WeedMD to pay down its debt.
The Company retains all aspects of its existing medical cannabis business, including its highly regarded Starseed Medicinal brand. As a result of the facility optimization strategy initiated in early 2021 and the sale announced today, WeedMD is realizing material operational efficiencies by streamlining and consolidating its cultivation operations at its Strathroy, Ontario facility and processing and production activities at its Aylmer, Ontario site.
“We continue to execute on our strategic plans to optimize and solidify the areas of our business that will drive increased revenue, improve our cash-flow, maximize our margins, pay down debt, and move us closer to profitability,” said George Scorsis, Interim CEO and Executive Chair of WeedMD. “Starseed Medicinal has been an important accretive addition to our business and with our operations now fully centralized at our cultivation and production sites in the London-area, we are now fully ramped up in a more efficient manner. We are already seeing these optimization initiatives improving productivity and reducing our production costs, all for the long-term best interests of our patients, customers and shareholders.”