IVITF - Invictus MD Jumpstarts Revenue Stream With Sale of First 120 kg of Flower to Canopy Growth
Invictus MD strategies Corp. (TSXV: IMH) (OTC: IVITF) is announcing the sale of its first 120 kilos of dried flower from AB Laboratories Inc. to Canopy Growth Corporation (TSX: WEED). The deal puts AB Labs on track for achieving 26,000 kg run-rate production capacity for 2018 with a net capacity of 22,150 kilograms to Invictus MD.
Additionally, the Company is announcing it has signed a definitive agreement to increase its strategic investment in AB Labs, from its current 33.3 percent ownership interest to 50 percent.
Canopy Growth plans to use AB Labs' marijuana in its curated CraftGrow line on Tweed Main Street's online store. Tweed Main Street features only high-quality cannabis by an elite group of producers.
"Patients routinely get in touch with AB Labs inquiring about our high-quality product. Now, they can take advantage of Canopy Growth's Tweed Main Street to gain immediate and detailed information about our artisan cannabis. The effort gives us immediate access to the largest customer base in the rapidly expanding medical cannabis market," said Dan Kriznic, Chairman, and CEO of Invictus MD. "Our collaboration with Canopy Growth demonstrates our commitment to making the sector strong and helping to expose medical cannabis patients visiting Tweed Main Street, to another high quality, unique brand."
"On behalf of the Canopy Growth team, I want to congratulate the AB Labs team for achieving this milestone," said Mark Zekulin, president, Canopy Growth. "AB Labs is now the second CraftGrow partner to successfully transfer cannabis products to be sold through our Tweed Main Street e-commerce platform. We hope to have AB Labs cannabis available to our customers this quarter and look forward to many more successful transfers in the future."
Invictus MD’s completion of the agreement to increase its investment in AB Labs marks another critical milestone for Invictus MD as Canada moves within six months of the expected full adult-use legalization of cannabis. AB Labs received the amendment to sell dried marijuana earlier this month.
AB Labs Deal
The agreement includes a direct cash investment in AB Labs for $10 million to be used for the expansion of AB Labs' existing facility. The deal covers acquisition of the land and building at the existing facility from the landlord and the purchase of adjacent land and building including retrofitting costs towards an existing building on the adjoining property. The deal creates total production space of approximately 56,000 square feet. Invictus MD will make available to AB Labs a $2 million line of credit in the event costs exceed budget during the construction period.
"The increase in our ownership of AB Labs and the renovations of the Secondary Facility that will provide a combined production space at AB Labs and Acreage Pharms of approximately 95,000 square feet, will dramatically advance our timeline for increasing our expected annual run-rate production capacity at our facilities to 26,000 kilos in 2018 and 76,000 kilos in 2019 in time for the adult-use market. Invictus MD's funded capacity today is approximately 20,600 kilos making it one of the top licensed producers in Canada" said Dan Kriznic, Chairman, and CEO, of Invictus MD. "Increasing our production capacity has been a sharp focus of the Company. Our production will satisfy the significant demand in Canada for high quality, standardized, pesticide-free product for the current medical cannabis market and recreational market that is expected to begin mid-2018."
Invictus MD expects its 100% owned subsidiary Acreage Pharms Ltd. to obtain its sales license in the Q1 of 2018 as it has already harvested multiple successful crops and product has already been tested.
Invictus MD is committed to building significant kilogram capacity for the expected domestic and international demand.