· Terrace Global enters into an equity line and profit-sharing agreement with The Flowr Corporation (TSXV: FLWR) with Terrace Global to fund the operations at the Aljustrel outdoor site in Portugal in exchange for common shares and warrants in Flowr plus a 25% share of net proceeds from medical cannabis sales from the 2020 season, subject to reduction of such share of net proceeds in certain circumstances.
· Commencement of the first large-scale outdoor cultivation of medical cannabis in the E.U.
· Terrace Global and Flowr to jointly operate at least 30 acres (12 hectares) of outdoor medical cannabis to cultivate at Aljustrel site, leveraging operational expertise of both companies and Flowr’s existing infrastructure in Aljustrel and Sintra, Portugal
· As part of the Agreement, Terrace Global will be able to leverage Holigen’s E.U. GMP facility located in Sintra, Portugal.
· Terrace Global secures renewal option for the 2021 season on 5 acres (2 hectares) outdoor crop on substantially similar terms but with a 50% split of net proceeds.
· The Agreement fast-tracks Terrace Global’s operations in Portugal and provides a foundation for future extraction in the E.U.
FOR IMMEDIATE RELEASE
TORONTO, ONTARIO – May , 2020 – Terrace Global Inc. (“Terrace Global” or the “Company”) (TSXV:TRCE) is pleased to announce it has entered into an equity line and profit-sharing agreement (the “Agreement”) with The Flowr Corporation (TSXV: FLWR) (“Flowr”) for the purpose of jointly developing an outdoor medical cannabis project in Portugal (the “Project”). Under the terms of the Agreement, Terrace Global will fund certain operations and certain capital expenditures relating to the Project in exchange for the issuance of: (1) common shares of Flowr at the volume weighted average trading price of the shares on the day prior to such subscription less the maximum applicable discount available under the TSX Venture Exchange (“TSXV”) subject to a minimum price of $0.52 per share; and (2) warrants at an exercise price equal to the greater of $0.76 and the minimum exercise price permitted under the TSXV rules. In addition, the parties have agreed to divide the net proceeds from the Project on a 75% basis for Flowr and 25% basis for the Company, with an adjustment to 20% for the Company in certain circumstances. As part of the Agreement, a Technical Committee comprised of two representatives from the Company and two representatives from Flowr will oversee the Project. The Company also has a renewal option to cultivate at the Aljustrel site during the 2021 season at its sole discretion in exchange for a 50% split of net proceeds from the sale of any medical cannabis derived from that season’s operations.
In March 2020, Flowr received GMP (Good Manufacturing Certification) certification in accordance with European Union standards, for its manufacturing facility in Sintra, Portugal. The GMP certification was issued by INFARMED, I.P. (“INFARMED”), the Portuguese National Authority of Medicines and Health Products. This GMP certification allows the facility to manufacture and export GMP-certified finished medical cannabis products, specifically dried flower (Part I and II), from Portugal to international markets with legal medical cannabis regulations. The Sintra facility is located just outside of Lisbon.
“In light of the recent market upheaval, Terrace Global has been approached by several parties looking to access our operational expertise in outdoor cultivation and our ability to fund large-scale projects. The partnership with Flowr positions us well to focus on low-cost outdoor cultivation within the European Union at a time when there are still limited competitors,” commented Francisco Ortiz von Bismarck, Chief Executive Officer of the Company. “We are very excited to have Flowr as our outdoor medical cannabis cultivation partner. Flowr is comprised of a team of cannabis experts with extensive knowledge in the cultivation, manufacturing and processing of medical cannabis. In 2020, Flowr obtained GMP (Part I and II) from INFARMED at its production facility in Sintra, Portugal. We expect to be able to leverage Flowr’s operations and expertise, which will result in a very significant win for the Company and its partners.”
Holigen’s E.U. GMP facility located in Sintra, Portugal.
The shares and warrants acquired by Terrace Global will be held only for investment purposes. Terrace Global may from time to time in the future increase or decrease its ownership, control or direction over securities of Flowr, through market transactions, private agreements or otherwise.
About Terrace Global
Terrace Global is a multi-country operator (MCO) led by experienced cannabis entrepreneurs focused on the development and acquisition of international cannabis assets. Terrace Global’s focus is on federally legal jurisdictions with existing domestic demand, low cost inputs and approved for exportation. Terrace Global’s existing asset platform consists of: (1) a 33.75% indirect equity interest in one of the currently two recreational cannabis operations in Uruguay; (2) 100% of Oransur, S.A., a Uruguayan company producing high CBD hemp in Uruguay; (3) 100% of Terra Nova Produção e Comercialização de Produtos Natuis e Farmacêuticos, Lda, a Portuguese company with a pre-license issued by INFARMED for the cultivation, importation, and exportation of medical cannabis in Portugal; and (4) 100% of Pharmabinoide S.L., a Spanish company producing and commercializing hemp in Spain. MariMed Inc. (OTCQX: MRMD), a multi-state cannabis operator in the U.S., dedicated to improving the health and wellness of people through the use of cannabinoids and cannabis products, owns approximately 6% of Terrace Global.
The Flowr Corporation is a Toronto-headquartered cannabis company with operations in Canada, Europe, and Australia. Its Canadian operating campus, located in Kelowna, BC, includes a purpose-built, GMP-designed indoor cultivation facility; an outdoor and greenhouse cultivation site; and a state-of-the-art R&D facility. From this campus, Flowr produces recreational and medicinal products. Internationally, Flowr intends to service the global medical cannabis market through its subsidiary Holigen, which has a license for cannabis cultivation in Portugal and operates GMP licensed facilities in both Portugal and Australia.
This news release contains certain forward-looking statements, including, but not limited to, statements about the Company’s future plans and intentions. Wherever possible, words such as “may”, “will”, “should”, “could”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict” or “potential” or the negative or other variations of these words, or similar words or phrases, have been used to identify these forward-looking statements. These statements reflect management’s current beliefs and are based on information currently available to management as at the date hereof.
Forward-looking statements involve significant risk, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking statements. These factors should be considered carefully and readers should not place undue reliance on the forward-looking statements. Although the forward-looking statements contained in this news release are based upon what management believes to be reasonable assumptions, the Company cannot assure readers that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this news release, and the Company assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law.
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release