- Cannabis company Veritas Pharma (CSE:VRT) has signed a letter of intent to acquire Indigenous Bloom Hemp
- Veritas will wholly acquire Indigenous Bloom Hemp for C$28 million, which will be completed via the issuance of common shares
- Indigenous Bloom Hemp is currently operating under a third-party cultivation license, but has applied to Health Canada for its own
- A definitive agreement is expected to be finalised and executed by July 31, 2020
- Veritas Pharma (VRT) is holding steady at 16 cents per share, with a market cap of $2.47 million
Cannabis company Veritas Pharma (CSE:VRT) has signed a letter of intent to acquire Indigenous Bloom Hemp.
Based in Southern Manitoba, Indigenous Bloom Hemp operates a large-scale industrial hemp farm on roughly 347 acres of zoned land.
Under a third-party cultivation license, the company produces and sells a range of hemp biomass, flower and phytocannabinoid extracts.
Indigenous Bloom Hemp has applied to Health Canada for its own permit and will transition to that license once approval is received.
Prior to engaging the letter of intent, Veritas commissioned an independent valuation of Indigenous Bloom Hemp to be undertaken by Maarschalk Valuations. The results of this analysis returned a total value of C$28 million for the company’s operations and assets.
Peter McFadden, Interim CEO of Veritas Pharma, noted that the acquisition will allow the company to enter into a phase of revenue generation.
“This transaction is also a reflection upon Veritas’ ambitions to deliver shareholder value by engaging in projects that have the potential to be profitable in short to mid-term while divesting itself from projects with long-term or uncertain revenue horizons,” he said.
Under the terms of the deal, Veritas will wholly acquire Indigenous Bloom Hemp through the issuance of $28 million in common shares. The price of these shares will be determined on the day prior to the closing of the acquisition.
A definitive agreement is expected to be executed by July 31 this year, and the resulting entity’s Board of Directors will consist of nominees from both parties.
Veritas Pharma (VRT) is currently steady at 16 cents per share, as of 11:30am EDT.