Lorimer Wilson Blog | Invictus MD Strategies Corp.Has Inked A Letter Of Intent (LOI) To Increase Its Ownership Interest In AB Laboratories Inc. | Talkmarkets
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Invictus MD Strategies Corp.Has Inked A Letter Of Intent (LOI) To Increase Its Ownership Interest In AB Laboratories Inc.

Date: Thursday, January 11, 2018 6:13 PM EST

Written by SmallCapPower.com

Invictus MD Strategies Corp. (IVITF), a platform for licensed cannabis producers in Canada, announced this past Monday that it has inked a Letter of Intent (LOI) to increase its ownership interest in AB Laboratories Inc., an Ontario-based licensed producer under the ACMPR, to 50% from the current 33.3%. Invictus MD had acquired the initial 33.3% in AB Labs for $10.5 million in December 2016...

Under the terms of the LOI, Invictus MD would make a cash payment of C$10.0 million for the expansion of AB Labs’ existing facility and the acquisition of land and building at the existing facility and adjacent property (secondary facility) for a combined production space of ~56,000 sq. ft. Additionally, Invictus MD will provide a C$2 million line of credit to AB Labs if costs exceed budget during the construction period.

AB Labs has completed the 15,600 sq. ft. Phase I facility with annual production capacity of 900 kg and plans to complete the 40,000 sq. ft. Phase II expansion by June 2018, for an additional capacity of 4,000 kg annually, taking the combined capacity to 4,900 kg annually. Invictus share at 50% will be 2,450 kgs. Invictus’ 100%-owned subsidiary Acreage Pharms has completed Phase I (6,600 sq. ft with 600 kg annual capacity), and is expected to complete Phase II (33,000 sq ft with 4,400 kgs capacity) in January 2018 and Phase 3 (80,000 sq ft with 14,000 kgs capacity) in September 2018, for a combined annual capacity of 19,000 kgs. By September 2018, Invictus’ total capacity from AB Labs and Acreage Pharms will reach 22,150 kgs annually.

As part of the news release, Invictus MD also announced that AB Labs has received sales license to sell dried marijuana under the ACMPR. With the receipt of this license, AB Labs intends to sell 130 kgs of its inventory in January 2018, to Canopy Growth Corporation (TWMJF), marking its first revenue stream since inception.

Invictus MD Chairman and CEO Dan Kriznic said, “...AB Labs produces high quality strains, which will meet the increasing demand in the Canadian marketplace. We also expect to receive a sales license for Acreage Pharms Ltd. within the first quarter of 2018.”

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