VANCOUVER, BRITISH COLUMBIA--(Marketwired - Oct. 28, 2016) - Finore Mining Inc. ("Finore" or the "Company") (CSE:FIN) (CSE:FIN.CN) (OTC PINK:FNREF) is pleased to announce that it has signed a letter agreement dated October 27, 2016 (the "Assignment Agreement") with an arm's length private British Columbia company (the "Assignor"), pursuant to which the Assignor has assigned to the Company the rights and obligations of a letter agreement dated October 25, 2016 (the "Letter Agreement") between the Assignor and Kushtown USA, LLC ("Kushtown") a private California limited liability company. Pursuant to the terms of the Letter Agreement, the Company will acquire all of the issued and outstanding securities of Kushtown (the "Transaction").
About Kushtown USA (www.kushtownusa.com)
Kushtown USA LLC is a California based leading liquid edibles company that specializes in cannabis infused medicated water, sodas, hot sauces and barbecue sauces. Since 2000, Kushtown has been one of the leaders in marijuana beverages and edible products in California, with sales to over 200 medical marijuana dispensaries.
Kushtown currently markets and distributes:
Kushtown Hot Sauce
Kushtown BBQ sauce
Kushtown holds trademark rights to the Kushtown line of products, and management plans to leverage the established Kushtown brand name in California and aims to expand the Kushtown brand into the recreational cannabis market across North America, pending the November 8, 2016 vote in California and other States to legalize recreational marijuana.
California Proposition 64, the California Marijuana Legalization Initiative will be on the ballot on November 8, 2016
The accelerating pace of marijuana legalization in the United States has grabbed headlines around the world in the past few months. In the United States, four states (and the District of Columbia) already allow the use of recreational marijuana. On November 8, 2016, alongside the presidential election five more will vote on similar legalization - California, Nevada, Maine, Massachusetts and Arizona.
Medical marijuana has been given the green light in half of all U.S. states. Legal cannabis sales in the United States jumped 17 percent, to $5.4 billion, in 2015 and are expected to grow by 25 percent this year, to $6.7 billion, according to Arcview Market Research.
By 2020 legal cannabis sales in the United States are projected to hit $21.8 billion. California currently accounts for 49 percent of all US cannabis sales by state and it is predicted that the legal cannabis market will see a whopping $21.8 billion in total annual sales by 2020. (By comparison, at that point, the legal marijuana market could be bigger than the National Football League, which saw roughly $12 billion of revenue last year but is aiming to reach $25 billion by 2027.)
Kushtown is well positioned to capitalize on the changing legislation in the marijuana industry in California and the company plans to execute an aggressive marketing and distribution plan to expand the Kushtown brand of liquid edibles across North America. Management of Kushtown has built an excellent reputation operating in California's medical marijuana market and is a leading liquid edibles company in California. With California's potential move towards legalization, Kushtown is planning an aggressive growth strategy and is currently in the process of acquiring a high output automated bottling and packaging plant to be installed and operational in the coming weeks.
Pursuant to the terms of the Letter Agreement, the Company will, within 14 days of signing of the Letter Agreement, pay the shareholders of Kushtown aggregate cash consideration of US$50,000 (the "Cash Payment") and shall advance a loan to Kushtown of US$50,000 (the "Loan"). The Cash Payment and the Loan will be evidenced by a promissory note(s) and will be secured by a pledge over in aggregate 20% of the issued and outstanding shares of Kushtown. In addition, upon closing of the Transaction, the Company will issue to Kushtown shareholders an aggregate of 8,440,845 common shares in the capital of the Company (the "Payment Shares") at a deemed price of CDN$0.15 per Payment Share for total share consideration of CDN$1,266,126.75 (US$950,000). The Payment Shares will be subject to escrow conditions and/or resale restrictions as required by applicable securities laws and the policies of the Canadian Securities Exchange (the "CSE").
Pursuant to the terms of the Assignment Agreement, the Company will, upon closing of the Transaction, issue 2,500,000 common shares to the Assignor at a deemed price of CDN$0.15 per share and shall grant the Assignor a 2% net profits interest royalty on all Kushtown branded products sold by the Company.
The Transaction remains subject to certain closing conditions, including, completion of due diligence, the negotiation and signing of a definitive agreement and obtaining all necessary approvals, including, approval of the respective boards, the approval of the CSE, and if applicable, shareholders of the Company. There can be no guarantees that the Transaction will be completed as proposed or at all.
None of the Payment Shares to be issued pursuant to the Transaction have been or will be registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws, and any Payment Shares issued pursuant to the Transaction are anticipated to be issued in reliance upon available exemptions from such registration requirements pursuant to Rule 506(b) of Regulation D and/or Section 4(a)(2) of the U.S. Securities Act and applicable exemptions under state securities laws. In addition, the Payment Shares to be issued pursuant to the Transaction under an exemption from the registration requirements of the U.S. Securities Act will be "restricted securities" as defined under Rule 144(a)(3) of the U.S. Securities Act and will contain the appropriate restrictive legend as required under the U.S. Securities Act.
The CSE does not accept responsibility for the adequacy or accuracy of this release.
Cautionary Statement Regarding "Forward-Looking" Information
The forward-looking information contained in this press release is made as of the date of this press release and, except as required by applicable law, the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking information, whether as a result of new information, future events or otherwise, except as may be required by law. By its very nature, such forward-looking information requires the Company to make assumptions that may not materialize or that may not be accurate. This forward-looking information is subject to known and unknown risks and uncertainties and other factors, which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by such information.