Highmark Marketing Inc.
CNSX : HMK

Highmark Marketing Inc.

July 29, 2014 09:24 ET

Highmark Enters Into a Non-Binding LOI With a Corporation in the Final Stages of Becoming a Licensed Producer of Marijuana

VANCOUVER, BRITISH COLUMBIA--(Marketwired - July 29, 2014) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Highmark Marketing Inc. (CSE:HMK) ("Highmark") is pleased to announce that it has entered into a non-binding letter of intent (the "Letter") with a corporation (the "Corporation") to acquire 51% of its authorized share capital.

The Corporation is the final stages of their application to Health Canada to become a licensed producer of marijuana under the Marihuana for Medical Purposes Regulations (the "MMPR"). The intended facility is 16,000 square feet and the Corporation has been granted approval from Health Canada to build out the facility ("Ready to Build Letter"). After completing the construction of the facility as per the Ready to Build Letter the Corporation will schedule an inspection by Health Canada, and upon receiving approval the Corporation would then be granted a License to Produce.

Highmark and the Corporation are now negotiating the terms of the long form agreement, and pursuant to the Letter Highmark will issue 30,000 common shares to the Corporation.

The estimated cost of upgrading the facility to comply with the requirements set out in Health Canada's Ready to Build letter is $2,000,000. The long form agreement will contain a payment schedule whereby Highmark will provide the necessary financing by way of a convertible loan which will convert, at Highmark's option, into stock of the Corporation that will be equal to 51% of the total issued and outstanding shares of every class of the Corporation. Highmark intends to fund its commitments under the long form agreement with Corporation by way of an equity financing in the amount of $2,000,000.

The Corporation cannot legally become a producer under the MMPR until it has been granted a license, and it is not known if and when the Corporation will obtain a license. The key milestones to obtaining a license include the completion of upgrades to the facility as per the Ready to Build letter, approval from Health Canada to produce marijuana upon inspection of the facility, and finally approval to distribute the product to patients.

The Corporation has a management team well suited to the production of marijuana. One Co-Founder holds a Master Grower designation and was a producer of marijuana in the U.S.A. under a state sanctioned program, and he has more than 20 years' experience working in the agricultural sector. Another Co-Founder has been a Health Canada designated grower of marijuana for 3 years, and another key member of the management team holds a Bachelor's Degree in Economics and has a successful track record of managing a labour force of up to 40 employees.

The Corporation has presented Highmark a comprehensive five-year business plan in which it forecasts to reach profitability in the second year of operations after receiving Health Canada approval to become Licensed Producer. In that second year of operations, the Corporation is planning on sales of up to $472,000 per month, and obtaining $4,720,000 in annual sales, with a corresponding net income of $2,225,000.

Highmark intends on providing new information about the Corporation, and its assets when Due Dilligence permits, and will additionally update the status of the long form agreement when possible.

About Highmark

Highmark is a nutraceutical company, based in British Columbia, focused on bringing the health benefits of natural and herbal remedies to the market. Highmark intends to acquire, license, distribute, and market products in the nutraceutical industry.

Further information about Highmark is available under its profile on the SEDAR website www.sedar.com and on Highmark's page on the CSE website.

The CSE has not reviewed, nor approved or disapproved the content of this press release.

Forward-Looking Information:

This press release may include forward-looking information within the meaning of Canadian securities legislation, concerning the business of Highmark. Forward-looking information is based on certain key expectations and assumptions made by the management of Highmark, including future plans for acquisitions. Although Highmark believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because Highmark can give no assurance that they will prove to be correct. Forward-looking statements contained in this press release are made as of the date of this press release. Highmark disclaims any intent or obligation to update publicly any forward-looking information, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein in the United States. The securities described herein have not been and will not be registered under the United States Securities Act of 1933, as amended, or any applicable securities laws or any state of the United States and may not be offered or sold in the United States or to the account or benefit of a person in the United States absent an exemption from the registration requirements.

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