VANCOUVER, BRITISH COLUMBIA--(Marketwired - June 3, 2014) - Supreme Pharmaceuticals Inc. ("Supreme" or the "Company") (OTCBB:SPRWF)(CSE:SL) is pleased to report that the Company has closed the previously announced arms-length acquisition of a Southern Ontario based company (the "Target Company") that holds a pre-build Marijuana for Medical Purposes Regulations licence ("MMPR Licence"). Under the terms of the MMPR Licence, the Target Company can build out and operate the recently purchased 342,000 square foot facility capable of producing up to 24,000,000 grams (24,000 kilograms) of medicinal marijuana per year.
To complete the licensing requirement and move from pre-build status to post-licence production, the Target Company must complete the installation of the required security measures. Once Health Canada completes its final inspection of the facility, the Target Company will be granted an MMPR licence. It is anticipated that initial production could commence by the fourth quarter of 2014. The Target Company anticipates it will take 90 days to construct and implement the required security measures. The construction project is under way.
Terms of the Target Company Acquisition
The Company has agreed to issue a total of 93,211,063 common shares at a deemed price of 0.07 per share, half of which to be issued on closing and the other half upon granting of the full MMPR Licence. The parties have entered into an escrow agreement pursuant to which 70,389,957 shares will be released over a 3 year period in 15% tranches every six months, the first release being on December 1, 2014. Neither control of or the board of Supreme will change.
Management stated: "This first acquistion by Supreme is a very real step in becoming a medical marijuana producer in Canada. This project has both the scale and the timing to make the Company one of the leaders in this new field. While we continue to look at additional acquisitions, our immediate focus is to get this facility into production."
FORWARD LOOKING INFORMATION
This news release contains forward-looking statements. The use of any of the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "believe" and similar expressions are intended to identify forward-looking statements. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. This news release includes forward-looking statements with respect to the up grading of the facility, the timing on completetion of the MMPR License conditions and the start of production. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. These statements speak only as of the date of this news release. Actual results could differ materially from those currently anticipated due to a number of factors and risks including various risk factors discussed in the Company's disclosure documents which can be found under the Company's profile on www.sedar.com and such factors as the Company failing to finish the upgrading of the facility and put the same into production in accordance within the terms of the MMPR license. This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbour provisions of the Private Securities Litigation Reform Act of 1995.