CALGARY, ALBERTA--(Marketwired - March 25, 2014) - Supreme Pharmaceuticals Inc. (the "Company") (TSX VENTURE:SL)(OTCBB:SPRWF) is pleased to announce that the Company has signed a conditional agreement with an arms-length South Okanagan-based company, whereby the Company has the option to purchase its producing medical marijuana business until March 23, 2015 for the sum of $1,000,000, payable in cash and shares, subject to regulatory approval. The Company is currently in a 10-business day due diligence period and if satisfied, Supreme will, subject to prior approval of the TSXV, make a $100,000 option payment.
The medical marijuana industry in Canada is undergoing massive reform as a result of the new Marijuana for Medical Purposes Regulation ("MMPR") regulation scheduled to come into effect April 1st, 2014, or some date thereafter-pending legal review. The vendor of the optioned medical marijuana business (the "Vendor") is currently producing marijuana under Medical Marijuana Access Program ("MMAP") licences and with Friday's court injunction to extend the MMAP program, will be able to continue to operate under its current licences past the April 1st, 2014 deadline until a trial can be held to argue this further, currently anticipated to be in 9 months. The Vendor will be applying for the new MMPR licence to produce and sell commercial medical marijuana, a process expected to take several months. Health Canada has currently issued a total of twelve commercial licences and has advised that it will be issuing additional licences. The Company's initial assessment is that the Vendor and its advisors meet the criteria set forth by the government due to its advanced business plan and key industry veterans involved. The Vendor is a past and current producer and has been in business since July of 2013 with 4 licenses for personal production. There is no assurance that such a license will be granted to the Vendor, which will be a key condition in the Company's decision as to whether to exercise the option or not.
British Columbia is known for its high quality marijuana production. Health Canada has reported that British Columbia produces 69.4% of the medical marijuana plants authorized for production within the country. British Columbia is prolific for both its agriculture and horticulture. The climate for growing marijuana in the Okanagan is arguably the best in the world. Analysts and industry experts estimate that this new commercial scale medical marijuana industry could reach $2.6 billion by 2016.
President and CEO Mr. David Stadnyk states, "We are excited to be able to enter into an agreement to purchase a business that is established and has a realistic chance of acquiring a major MMPR commercial license from Health Canada. We are continuing to evaluate additional opportunities in both Canada and the United States, which will give our shareholders upside potential. We believe this industry is in its infancy and we are excited to be able to get into the business in the industry's early days. We think that this life science field complements the pharmaceutical and bio-medical devices that we are currently reviewing, and that 2014 will be a satisfying one for our shareholders."
The Company also announces that it is undertaking a non-brokered private placement of up to $500,000 by the issuance of units at $0.075, with each unit consisting of one common share and one warrant entitling the holder to purchase one additional share for 2 years at $0.10. The Company will pay commissions to those arms length finders assisting in the private placement of 8% cash, and 8% in finder's warrants to purchase shares at $0.075 for 2 years. Proceeds will be used for general working capital.
The Company will issue a further press release when further information becomes available for publication.
SUPREME PHARMACEUTICALS INC.
David Stadnyk, President & CEO
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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. 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. 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 harbor provisions of the Private Securities Litigation Reform Act of 1995.