Zenabis Global Inc. (TSX:ZENA) (“Zenabis” or the “Company“) today announced that its wholly-owned subsidiary, Zenabis Ltd., has entered into an agreement with High Park Holdings Ltd. (“High Park”) (the “Supply Agreement”), a wholly-owned subsidiary of Tilray, Inc. (NASDAQ:TLRY) (“Tilray”), pursuant to which High Park will advance CAD $30 million to Zenabis (the “prepaid amount”) in return for a supply of dried cannabis from Zenabis.
Under the terms of the Supply Agreement, Zenabis will deliver a monthly quantity of dried cannabis to High Park commencing in October 2019. Zenabis expects the prepaid amount to be retired within a year. Zenabis does not expect delivery commitments to High Park to impact its ability to supply existing customers. The wholesale pricing under the Supply Agreement will vary depending on the product type and format High Park elects to order.
“Zenabis is well-positioned to supply high-quality cannabis to High Park via this non-dilutive financing arrangement that capitalizes on our rapidly increasing annual cultivation capacity, which we expect to reach 131,200 kg of dried cannabis before deliveries to High Park are scheduled to commence. This Supply Agreement demonstrates the confidence of high-quality counterparties in our ability to produce consistent, premium cannabis product and we are looking forward to fulfilling our commitments to High Park, as well as to our provincial counterparties and the communities in which we operate,” said Andrew Grieve, Chief Executive Officer of Zenabis.
Mr. Grieve continued, “This arrangement significantly reduces the requirement for potential further draws on our $60 million unsecured convertible debenture facility.”
Brownstone Advisors Inc. (“Brownstone”) acted as strategic advisors to Zenabis in connection with the Supply Agreement. Zenabis will pay a strategic advisory fee to Brownstone, which fee will include (subject to receipt of all required regulatory approvals) 319,148 common shares of Zenabis.
SOURCE Zenabis Global Inc.
