Curaleaf to Enter European Cannabis Industry with Acquisition of EMMAC Life Sciences Restricted – Europe’s Top Independent Cannabis Organization
- EMMAC Brings the Biggest Vertically Integrated Independent Cannabis Organization in Europe with a Presence in Essential European Health-related Cannabis Markets, Such as the United Kingdom, Germany, Italy, Spain, and Portugal
- With the European Population of Practically 748 Million(1), the Prospective Addressable Industry is Far more than Twice the Size of U.S. Industry
WAKEFIELD, Mass., March 9, 2021 /PRNewswire/ — Curaleaf Holdings, Inc. (CSE: CURA) (OTCQX: CURLF) (“Curaleaf” or the “Company”), a top U.S. provider of customer items in cannabis, nowadays announced that it has signed a definitive agreement to obtain EMMAC Life Sciences Restricted (“EMMAC”), the biggest vertically integrated independent cannabis enterprise in Europe for base consideration of roughly US$286 million to be paid 85% in Curaleaf subordinate voting shares and 15% in money. Contingent consideration of up to US$57 million will be paid in Curaleaf subordinate voting shares and money in the very same ratio primarily based upon the effective achievement of functionality milestones. The proposed transaction delivers Curaleaf with a created platform for entry into the European cannabis marketplace.
As Europe’s biggest vertically integrated independent cannabis enterprise, EMMAC’s platform brings cultivation, EU-GMP processing, distribution, and R&D operations across various crucial European healthcare cannabis markets, which includes the United Kingdom, Germany, Italy, Spain and Portugal. EMMAC also has an operational presence and partnerships in European Union nations that are enacting new healthcare cannabis access applications. EMMAC’s Portugal primarily based cultivation facility is an sector leader in cannabis flower production expense.
Curaleaf’s acquisition of EMMAC, announced nowadays, delivers an sophisticated base to attain scale inside the nascent European cannabis marketplace and transform Curaleaf into a definitely international cannabis customer packaged goods enterprise. The customer and political liberalization trends about cannabis that are sweeping the U.S. are also increasingly taking hold in Europe.
Boris Jordan, Curaleaf Executive Chairman
Curaleaf will seek to leverage our branded cannabis customer packaged goods approach across Europe, a marketplace which delivers for cross-border cannabis distribution. The European cannabis marketplace has the prospective to exceed the U.S. cannabis marketplace more than the extended-term and will assist fuel our development for years to come.
Joseph Bayern, Curaleaf CEO, commented, “Today marks a milestone moment as Curaleaf will quickly develop into the U.S. multi-state operator with the biggest European footprint. Our acquisition of EMMAC will present a robust platform for the future introduction of our Curaleaf and Choose brands into the European marketplace, all leveraging our science, R&D, formulated solution and kind aspect innovations, as effectively as vast customer insights that we have constructed via our leadership position in the U.S. Primarily based on consumption habits we have observed in the U.S., we think that more than time Europe could develop to in excess of a US$120 billion² total addressable marketplace chance.”
EMMAC’s finest-in-class management group brings in depth encounter top and delivering in very regulated industries. Following the effective completion of the proposed transaction, the EMMAC management group will continue to lead Curaleaf’s new European presence, driving regional European approach and day-to-day operations beneath the leadership of Antonio Costanzo, Chief Executive Officer of EMMAC.
Antonio Costanzo, Chief Executive Officer of EMMAC, stated “Curaleaf’s acquisition of EMMAC is not only a substantial milestone for EMMAC, but for the European cannabis marketplace as a complete. As portion of Curaleaf, a effectively-capitalized leader of the U.S. cannabis marketplace, EMMAC is poised to exploit the speedy pace of development of the European marketplace, driven by regulatory modify and the rising demand for access to premium high-quality cannabis items.”
The mixture of Curaleaf and EMMAC creates a worldwide platform to address these significant new possibilities across Europe.
Antonio Costanzo, Chief Executive Officer of EMMAC
With EMMAC’s science-led method, wealth of regional marketplace encounter, as effectively as our network of provide and distribution partnerships all through Europe, we are now uniquely positioned to reinforce our location as 1 of Europe’s leaders in the production and provide of healthcare cannabis, wellness CBD, hemp and other derivative items.
Terra Verde, EMMAC’s European marketplace cultivation facility in Portugal is 1 of the oldest licensed cannabis increasing facilities in Europe with roughly two hectares of cultivation region. It delivers EMMAC with the prospective to serve consumers across crucial European healthcare cannabis nation markets as effectively as supporting exports internationally to nations such as Israel, amongst other individuals. EMMAC plans to drastically boost its cultivation capacity in 2021, and to exceed ten tons per year by 2022, in order to accommodate future development associated to the expansion of access to cannabis across the significant European healthcare and adult-use, as effectively as export markets.
The proposed transaction constitutes a “related celebration transaction” inside the which means of Multilateral Instrument 61-101 – Protection of Minority Safety Holders in Specific Transactions (“MI 61-101”) as a outcome of Measure eight Ventures, LP an investment fund managed by Mr. Boris Jordan, the Executive Chairman of the board of directors and handle individual of Curaleaf, obtaining an interest in the proposed transaction by way of a profit interest and a convertible debt instrument which will convert into shares of EMMAC representing eight% of EMMAC equity at closing of the proposed transaction. Mr. Jordan owns a minority interest in Measure eight Ventures, LP. Curaleaf intends to rely upon the exemptions offered beneath Sections five.five(b) of MI 61-101 – Issuer Not Listed on Specified Markets and five.7(1)(a) of MI 61-101 – Fair Industry Worth Not Far more the 25% of Industry Capitalization from the needs that Curaleaf get a formal valuation of the proposed transaction and that the proposed transaction get the approval of the minority shareholders of Curaleaf.
The terms of the proposed transaction had been negotiated by management and advisors beneath guidance of, and unanimously suggested for approval by, a committee composed of members of the board of directors of Curaleaf absolutely free from any conflict of interest with respect to the proposed transaction (the “Special Committee”), all of which are independent members of the board of directors inside the which means of National Instrument 52-110 – Audit Committees. The Specific Committee has received a fairness opinion from Eight Capital (“Eight Capital”) to the impact that, in its opinion, and primarily based upon and topic to the assumptions, limitations and qualifications set forth therein, the consideration to be paid by Curaleaf as portion of the proposed transaction is fair from a economic point of view, to Curaleaf. The charge paid to Eight Capital in connection with the delivery of its fairness opinion is not contingent on the effective implementation of the proposed transaction.
Transaction Terms & Approvals
Curaleaf will obtain EMMAC for base consideration of £0.50 per share of EMMAC, comprised of roughly GBP£35 million in money (equivalent to roughly US$50 million in money), roughly 16,797,963 million subordinate voting shares of Curaleaf (primarily based on the exchange ratio of Curaleaf subordinate voting shares for every EMMAC share agreed by the parties). At yesterday’s Curaleaf closing share price tag of US$14.12 on the CSE, the total base consideration in Curaleaf subordinate voting shares and money is valued at US$286 million. An more US$57 million³ consideration will be paid topic to functionality-primarily based earn-outs. Post-transaction, the former shareholders of EMMAC will have roughly three% pro forma ownership of Curaleaf on a totally-diluted basis, ahead of factoring in the functionality-primarily based earn-outs. The Curaleaf share consideration will be topic to a statutory 4-month hold period as effectively as a lock-up agreement with every recipient restricting trading of the share received, with release of five% from such restrictions at the finish of every calendar quarter following the closing. The proposed transaction is anticipated to close early in the second quarter of 2021, topic to customary closing circumstances and regulatory approval. The transaction has been unanimously authorized by the boards of directors of each EMMAC and Curaleaf, with Mr. Boris Jordan abstaining from the voting.
Stikeman Elliott LLP and Memery Crystal LLP acted as legal advisors to Curaleaf. Eight Capital acted as economic advisor and offered a fairness opinion to the Specific Committee. Canaccord Genuity Group acted as economic advisor and offered a fairness opinion to EMMAC, and Norton Rose Fulbright acted as legal advisor to EMMAC. EMMAC’s European legal group was led by Hill Dickinson LLP in the United Kingdom.
About EMMAC Life Sciences Restricted
EMMAC Life Sciences Restricted (EMMAC) is the biggest vertically integrated independent cannabis enterprise in Europe, bringing with each other pioneering science and analysis with cutting-edge cultivation, extraction and production. With a special provide and distribution network all through Europe, EMMAC’s vision is to bring the life-enhancing prospective of cannabis to the persons who will need it. For additional information and facts please go to www.emmac.com.
About Curaleaf Holdings
Curaleaf Holdings, Inc. (CSE: CURA) (OTCQX: CURLF) (Curaleaf) is a top U.S. provider of customer items in cannabis, with a mission to boost lives by giving clarity about cannabis and self-assurance about consumption. As a vertically integrated, higher-development cannabis operator identified for high-quality, experience and reliability, the Organization and its brands, which includes Curaleaf, Choose and Grassroots, present sector-top service, solution choice and accessibility across the healthcare and adult-use markets. Curaleaf presently operates in 23 states with 101 dispensaries, 23 cultivation web pages and more than 30 processing web pages, and employs more than three,800 group members across the United States. Curaleaf is listed on the Canadian Securities Exchange beneath the symbol CURA and trades on the OTCQX marketplace beneath the symbol CURLF. For additional information and facts please go to www.curaleaf.com.
1 European marketplace population primarily based on United Nations 2020 estimate for European continent.
two Total European addressable marketplace primarily based on usage prices and commit estimates from U.S. Information from Cowen October 2020 analysis report.
three US$ten million in money and US$47 million to be paid via the issuance of subordinated voting shares of Curaleaf. The functionality-primarily based earn-outs consist of 4 separate milestones associated to income in the United Kingdom and Germany, recreational sales in the European Union, and volume targets in Portugal.
Original press release
Get ahead of the crowd by signing up for 420 Investor, the biggest & most complete premium subscription service for cannabis traders and investors considering that 2013.