IHMML is a Canadian company that has applied for a commercial medical marijuana license under the recently established Canadian Marihuana for Medical Purposes Regulations (MMPR). The MMPR came into effect on April 1, 2014 and is a federal program that legalizes the commercial production of medical marijuana for medical use. IHMML is currently owned by Zenabis Limited Partnership, a Canadian partnership owned by affiliates of International Herbs Ltd. (IHL), a leader in the production of fresh herbs and specialty produce in Canada, and The Monark Group (Monark), a full-service provider of pharmaceutical marketing, information technology and call center services in Canada. The IHL and Monark teams are integral to establishing IHMML’s contemplated business, namely, to acquire certain lands, retrofit and/or build a marijuana growing operation and engage in the growing, marketing, research and development, training, distribution and retail sale of medical marijuana in Canada as regulated by Health Canada.
IHMML is a party to an April 2014 subscription agreement under which a subsidiary of Medican, CanaLeaf Systems, Inc. (CanaLeaf), was to purchase 50% of IHMML for CDN$52 million. Under the terms of the transaction as set out in the LOI, CanaLeaf’s subscription rights would be restructured as follows:
The LOI is a non-binding statement of intention of the parties, and the final terms of the transaction are subject to change based on tax and regulatory considerations and additional negotiations between Medican and Zenabis. The parties are proceeding to prepare definitive agreements for the transaction, with the intention that a closing occur by September 15, 2014.
“This is a very exciting development for Medican as we seek to enter into a transaction that would afford Medican control of IHMML and bring the IHMML management team, which has years of agriculture and pharmaceutical sales experience in Canada, to Medican,” said Ken Williams, Medican’s CEO. “The transaction would also align the interests of the IHMML team and its affiliates with Medican’s interests by granting them majority ownership of our company. Finally, the transaction would grant Medican a right to acquire the remainder of this exciting new business. If we are able to reach conclusion on definitive documentation, we believe that Medican, through its interest in IHMML, will be well poised to capitalize on the emerging Canadian medical marijuana space. We look forward to finalizing this transaction in an expeditious manner.”
This press release and statements of representatives of Medican Enterprises, Inc. (the “Company”) related thereto includes forward-looking statements within the meaning of the U.S. federal securities laws. Forward looking statements are statements that are not historical facts. Such forward-looking statements are subject to significant risks and uncertainties that are subject to change based on various factors (many of which are beyond the Company’s control), which could cause actual results to differ from the forward looking statements. Such statements may include, without limitation, statements with respect to the Company’s plans, objectives, projections, expectations and intentions and other statements identified by words such as “projects,” “may,” “will,” “could,” “would,” “should,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “potential” or similar expressions. These statements are based upon the current beliefs and expectations of the Company’s management but are subject to significant risks and uncertainties, including those detailed in the Company’s filings with the Securities and Exchange Commission. Actual results (including, without limitation, the timing for and results of the proposed transaction described herein) may differ from those set forth in the forward-looking statements. Except as required by applicable law, the Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.