MPXOF - MPX International Establishes Operations in Thailand's Domestic Cannabis Market
(TheNewswire)
TORONTO, ONTARIO, and BANGKOK THAILAND – TheNewswire - June 1, 2021 – MPXInternational Corporation ( CSE:MPXI ) ; (CNSX:MPXI.CN); ( OTC:MPXOF) (“ MPX International ”,“ MPXI ” or the “ Corporation ”) , a multinational diversified cannabis company, and its subsidiary, Salus International ManagementLtd. (“ SIM ”), a management company currentlyfocussed on operations in Southeast Asia, are pleased to announce that SIM has entered into a management agreement with Salus Bioceutical (Thailand) Co. Ltd. (“ Salus Thailand ”), a Thailand-based medicalcannabis company jointly owned by SIM and a consortium of Thaibusiness people, whereby it will provide design, construction andtechnical support services, and ongoing management support of theproject in exchange for management and other fees for the provision ofits services. SIM’s partners in Salus Thailand consist of aconsortium of Thai business people who will play an active role ingovernment relations, negotiation and maintenance of supplyrelationships with medical and commercial institutions throughout thecountry and will be working closely with the Rajamangala University of Technology Isan SakonnakhonCampus (the “ University ”) and Sarapee Community Enterprise Green andClean (the “ Community Enterprise ”) to ensure optimal benefits to local interests withinChiang Mai province.
SIM will provide financial backing to Salus Thailandfor the development of a Thai GMP compliant research, cultivation andprocessing facility in Thailand’s Chiang Mai province (the“ Thai Facility ”) in the form of an interest-bearing, secured loan of upto a maximum of US$9 million (C$10,818,900). To date, SIM has raisedapproximately US$6 million (C$7,212,600) through the SIM Financing(which is defined and described below) from investors primarily inThailand, Europe and Canada which is sufficient to fully fund thefirst two phases of the development of the Thai Facility, includingcultivation, extraction, processing and distribution of high quality,Thai and EU-GMP medical grade cannabis products as well as CBDdistillate/isolate for the domestic Thailand commercial market sourcedfrom locally grown hemp.
MPXI has been issued 10million SIM Shares with a pre-money valuation of US$10 million(C$12,021,000). Following the completion of the maximum funding amountof US$9 million (C$10,818,900) under the SIM Financing, SIM will havea maximum post-valuation of US$19 million (C$22,839,900) .
MPXI’s entrance into the Southeast Asia marketfurther diversifies its opportunity to participate in global cannabismarkets, complementing its European projects in Switzerland and Malta,its cultivation in South Africa, its distribution plans in Australiaand its current and growing operations in Canada.
Cannabis in Thailand
Cannabis has been used extensively in Thailand as partof “Traditional Thai Medicine” for hundreds of years and, with thesupport of the Thai government, its use is being expanded into thepublic hospital system. Cannabis and cannabis derivatives must beprescribed by a medical practitioner and delivered through a hospitalor medical clinic. There is concern that such products must be grownand processed in accordance with Thai GMP standards and that adequatesupply be available to support the rapidly increasing demand forcannabis oils, topicals etc. With its population of almost 70 millionand its history of using cannabinoid-based medicines, Thailand couldquickly become one of the world’s largest medical cannabis markets,perhaps second only to the United States.
“Salus Thailand and SIM management have consultedextensively with our University partners at Rajamangala University of Technology ,the Thai FDA, the federal Government Pharmaceutical Office (the“ GPO ”), government representatives, hospital directors, clinicsand others within Thailand to ensure that our proposed operations willbe able to meet the expectations of all parties while remainingsensitive to the culture, regulatory environment and expectations ofthe University, the Thai government and the Thai medical community,”commented W. Scott Boyes, MPXI’s Chairman, President and CEO.“Plans have been finalized and construction has commenced on theerection of a group of structures at a site in the Doi Saket Districtof Chiang Mai province which will include 2,865 sq. m. (30,800 sq.ft.) of indoor cultivation and an additional building which will housea state-of-the art extraction and distillation laboratory for themanufacture of EU GMP-compliant medical cannabis products. We believethat we are the first North American medical cannabis company to enterthe Thai market and are delighted to be able to contribute to therapid growth of the cannabis industry in Thailand and, with exportsnow permitted by the Thai government, potentially, expand sales to theASEAN community of nations and the entire Southeast Asia region. Wesee the emerging markets in Europe and Asia to be formidable with eachone potentially larger than the projected size of that in NorthAmerica and are actively establishing a foothold in both; a strategythat will add near-term value to the Corporation and itsshareholders.”
Medical cannabis containing formulations of CBD and THCare in very high demand in Thailand and are priced much higher than inthe North American markets. Likewise high quality, commercial gradeCBD distillate and isolate are currently sold for several multiples ofU.S. prices (as high as US$8,000 per liter). Imports are severelyrestricted and Salus already has indications of interest from severalThailand-based cosmetic, food and beverage manufacturers exceeding7,000 liters of CBD distillate/isolate and is in negotiation with theGPO and several hospital groups for the offtake of GMP-grade medicalcannabis distillate and, potentially (subject to Thai FDA and GPOapproval), sublingual tablets and capsules, suppositories, transdermalpatches and medical quality edibles.
Wittawin Vidthayanon, Director of Salus Thailand,observed, “Our company will focus on producing high quality productsfor the domestic market, and possibly future export to the ASEANregion and beyond. Initially, however, there is a significant andgrowing demand for such products within Thailand and we expect thisgrowth to continue to accelerate. MPXI, Salus International Managementand Salus Bioceutical Thailand have assembled a strong management andadvisory team that will collectively contribute to the success of thisenterprise.”
The issuance of cannabis licenses in Thailand currentlyrequires the written support of a local social enterprise and one ormore medical or research institutions. Accordingly, Salus Thailand haspartnered with the Community Enterprise and the Universityentering into memoranda of agreements (the“ MOAs ”) with each of the Community Enterprise and theUniversity.
Thailand Facility and Domestic ThaiOperations
Construction and equipment costs for the Thai facilityare expected to be approximately US$5 million (C$6,010,500). Phase 1construction has started and includes the extraction, processing andpackaging operations. The project will support extraction requirementsfor Salus’ cultivation as well as that of the University along withthe biomass from hemp cultivation by local farmers and other licensedcultivators in the region. This initial phase is expected to beginproduction in Q4 2021.
The Phase 1 processing facility will be followed inlate Q4 2021 with the erection of a fabric dome specifically designedto house the medical cannabis cultivation and drying facilities with afirst crop expected in Q1 2022 (“ Phase 2 ”). Anadditional structure at the site will be converted in Q2 2022(“ Phase 3 ”) to provide for a combined 2,800 sq. m. (30,100 sq. ft.)of cultivation space capacity in Q2 2022 (“ Phase 3 ”).
The project will also include a Cannabis Learning andResearch Center to be operated in cooperation with the University andpilot farming of hemp and cannabis at five campuses of the Universitylocated all around North-Eastern Thailand.
SIM
SIM is a private Ontario corporation and apartially-owned subsidiary of MPX International Corporation along witha group of private shareholders. SIM was incorporated to providedesign, planning, financing, training, and on-going operationalsupport to cannabis initiatives, partnerships, and joint ventures inSoutheast Asia. Its revenue is generated primarily from fees chargedfor the supply of management services.
Salus Thailand
Salus Thailand is a Thai company involved in thecultivation, processing and distribution of high-quality medicalcannabis products to the medical community in Thailand, operating forthe benefit of the health and well-being of the Thai people.
The Community Enterprise
The Community Enterprise, which is a collective oflocal farmers and citizens who participate in the activity of businessoperations within their province, will receive an annual stipend whichwill be used to support its activities and will participate in theoutdoor and greenhouse cultivation of high-CBD/low-THC cannabisbiomass. In addition, Salus Thailand will acquire the biomass toprocess into medical and wellness products for sale into the domesticThai market.
The University
The University is made up of a system of nine campusesin Thailand providing undergraduate and graduate level education. TheUniversity is a multi-technology campus formatted by a wide variety ofteaching and learning to respond to the needs of students andcommunity in the upper North-Eastern Thailand. Located in the provinceof Sakonnakhon, in Thailand’s mountainous North-East, the Universityis the ideal institution for researching the agriculture and agronomyof the cannabis plant in the tropics. Salus Thailand has entered intoan MOA with the University to co-operate with research and developmentof cannabis strains and medical cannabis products and for thecultivation of cannabis biomass will besubsequently acquired and processed into medical and wellness productsby Salus Thailand for sale to the Thai market.
Financing
As set forth above, SIM completed a private placementfinancing (the “ SIMFinancing ”) of approximately US$6 million(C$7,212,600) of units (the “ SIM Units ”) of SIM at a price of US$1.00(C$1.20) per SIM Unit from investors in primarily in Thailand, Europeand Canada. SIM will use the proceeds to fully fund the first twophases of the development of a Thai GMP compliant research,cultivation and processing facility in Thailand’s Chiang Maiprovince (the “ ThaiFacility ”). Each SIM Unit in the SIM Financingconsists of one (1) common share (a “ SIM Share ”) in thecapital of SIM and one-half of one common share purchase warrant (a“ Warrant ”). Each Warrant entitles the holderthereof to acquire one SIM Share at a price of US$1.50 (C$1.80) for a period of twenty-four(24) months from the date of issue, subject to adjustment andacceleration in certain circumstances.
SIM will continue to accept investments up toapproximately US$3 million (C$3,606,300) from prospective qualified investors under thecurrent terms until June 30, 2021, at which time pricing may increaseor SIM may elect to fund the third phase of further cultivationexpansion using internally generated resources.
SIM may pay a cash placement fee equal to not more than5% of the aggregate gross proceeds paid by each subscriber of SIMUnits that are invested in the SIM Financing .
In addition, SIM may issue that number of common share purchase warrants (the “ Compensation Warrants ”) equal to not more than 2.5% of the aggregate number ofSIM Shares issued as part of the SIM Units and underlying the Warrantsas if exercised as of the closing date. The Compensation Warrants shall be exercisable at theExercise Price for a period of two (2) years from the applicableclosing date of the SIM Financing .
The cash placement fee will only be payable and theCompensation Warrants will only be issuable to third parties that havebeen formally engaged in order in order to assist with fund raisingefforts.
About MPX International Corporation
MPX International Corporation is a multinational diversified cannabis company focused on developing and operating assets across theinternational cannabis industry with an emphasis on cultivating,manufacturing and marketing products which include cannabinoids astheir primary active ingredient. With current operations spanning fivecontinents in Canada, Switzerland, South Africa, Malta, Australia andThailand as well as evolving partnership and distributionopportunities in other jurisdictions, MPXI continues to positionitself as an emergent global participant in the cannabisindustry.
Cautionary Statement RegardingForward-Looking Information
This news release includes certain“forward-looking statements” under applicable Canadian securitieslegislation that are not historical facts. Forward-looking statementsinvolve risks, uncertainties, and other factors that could causeactual results, performance, prospects, and opportunities to differmaterially from those expressed or implied by such forward-lookingstatements. Forward-looking statements in this news release include,but are not limited to, MPX International’s objectives andintentions. Forward-looking statements are necessarily based on anumber of estimates and assumptions that, while considered reasonable,are subject to known and unknown risks, uncertainties and otherfactors which may cause actual results and future events to differmaterially from those expressed or implied by such forward-lookingstatements. Such factors include, but are not limited to: generalbusiness, economic and social uncertainties; litigation, legislative,environmental and other judicial, regulatory, political andcompetitive developments; delay or failure to receive board,shareholder or regulatory approvals; the Corporation’s ability toeffectively deal with the restrictions, limitations and health issuespresented by the COVID-19 pandemic; future cannabis pricing; cannabiscultivation yields; costs of inputs; its ability to market productssuccessfully to its anticipated clients; reliance on key personnel andcontracted relationships with third parties; the regulatoryenvironment in Australia, Canada, Malta, South Africa, Switzerland andother international jurisdictions; the ability to complete any futurepotential transactions and the terms and conditions thereof; theapplication of federal, state, provincial, county and municipal laws;and the impact of increasing competition; those additional risks set out in MPXInternational’s public documents filed on SEDAR at www.sedar.com , including its audited annualconsolidated financial statements for the financial years endedSeptember 30, 2020 and 2019, and the corresponding management’sdiscussion and analysis; and other matters discussed in this newsrelease. Although MPX International believes that the assumptions andfactors used in preparing the forward-looking statements arereasonable, undue reliance should not be placed on these statements,which only apply as of the date of this news release, and no assurancecan be given that such eventswill occur in the disclosed time frames or at all. Except whererequired by law, MPX International disclaims any intention orobligation to update or revise any forward-looking statement, whetheras a result of new information, future events, or otherwise.
NOTFOR DISTRIBUTION TO NEWSWIRE SERVICES IN THE UNITED STATES OR FORDISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THISRESTRICTION MAY CONSTITUTE A VIOLATION OF UNITED STATES SECURITIESLAWS.
For further information about MPXI,please contact:
MPX International Corporation
W. Scott Boyes, Chairman, President andCEO
T: +1-416-840-4703
info@mpxinternationalcorp.com
or visit one our websites:
Salus Bioceutical (Thailand) Co. Ltd.
Wittawin Vidthayanon ,Director
T:+6680- 0 47 - 2244
NOTFOR DISTRIBUTION TO NEWSWIRE SERVICES IN THE UNITED STATES OR FORDISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THISRESTRICTION MAY CONSTITUTE A VIOLATION OF UNITED STATES SECURITIESLAWS.
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