Entourage Health Corp., a Canadian producer and distributor of award-winning cannabis products and brands, and renowned craft cultivator CannTx Life Sciences Inc., are pleased to confirm the closing of the previously announced acquisition of CannTx by Entourage. Following overwhelming approval from CannTx shareholders, and satisfaction of other closing conditions, the formerly privately owned micro-propagator, which operates out of its licensed production facility in Guelph, Ontario, is now a wholly owned subsidiary of Entourage.
“In finalizing this complementary transaction with the CannTx team, we are thrilled to emerge as a cannabis operator widely recognized for consistently producing award-winning cannabis products and brands – which now houses some of the most sought-after genetics, IP and craft specialities in Canada,” said George Scorsis, Interim CEO and Executive Chairman, Entourage. “We have brought together a team of industry experts and talented people that are crafting cannabis with passion and heart – all dedicated to bringing craft-grade cannabis products to our local markets. With new strains and further product expansion into hash, rosin production, tissue culture, micropropagation and craft cultivation specialties, we’re thrilled to add Royal City Cannabis Co. to our brand portfolio that includes Color Cannabis, Saturday Cannabis, Starseed Medicinal and Mary’s Medicinals Canada.”
Acquisition and Transaction Summary
Upon closing of the Acquisition, Entourage issued an aggregate of 57,352,488 Entourage common shares (“Common Shares”) to CannTx shareholders of which an aggregate of 3,571,429 of such Common Shares will be held in escrow to secure indemnification and other obligations undertaken by certain vendors.
Under the terms of the Acquisition, certain former CannTx shareholders entered into agreements pursuant to which an aggregate of 14,685,278 Common Shares are subject to a post-closing lock-up arrangement whereby one quarter of such Common Shares shall be released from lock-up in equal installments at the end of each six (6) month period following closing of the Acquisition.
Board of Directors
In connection with the closing of the Acquisition, the Company is pleased to announce the appointment of CannTx board members Andrew Bulmer and S. Randall Smallbone to Entourage’s board of directors (the “Board”). The Board is now comprised of the following directors:
George Scorsis, currently Interim CEO and Executive Chairman of Entourage.
Gail Paech, formerly Associate Deputy Minister, Ministry of Health, Ontario.
G. Edmund King, former CEO and Chairman of CIBC Wood Gundy, former Starseed director.
Jason Alexander, former Chief Legal Officer and Chief Strategy Officer of Starseed and Entourage.
Bruce Croxon, co-founder of Lavalife, former Dragon’s Den mentor, current BNN “Disruptors” host.
Lu Cacioppo, former Deloitte partner, now managing partner of private equity firm Beringer Capital.
Andrew Bulmer, formerly of Molson Coors, Red Bull, now President of Active International (Canada).
S. Randall Smallbone, former CFO of Magna Company’s Decoma International, currently President and CEO of Astron Connect Inc.
Additional information and biographies of Entourage’s board of directors can be found here.
Amendment to Second Secured Credit Facility
The Company also announced today that it has signed an amendment to its second secured credit facility entered into on September 30, 2020 (the “Credit Facility”). The amendments to the Credit Facility modify the terms under which Entourage secured up to $30 million of debt financing over a two-year term ending in 2022.
Under the terms of the amendment, the Company secured a deferral of certain of its financial covenants to December 31, 2021. In addition, the Company has agreed to a 25 basis point increase in the applicable interest rate margin on the Credit Facility, and retains the option, at the Company’s discretion, to capitalize interest in lieu of cash payments of interest. The Credit Facility continues to provide Entourage with non-dilutive financing and greater financial flexibility in alignment with market conditions. A copy of the Credit Facility agreement will be made available on the Company’s SEDAR page.
About Entourage Health Corp.
Entourage Health Corp. (formerly WeedMD Inc.) is the publicly traded parent company of WeedMD RX Inc. and CannTx Life Sciences Inc., licence holders producing and distributing cannabis products for both the medical and adult-use markets. The Company owns and operates a 158-acre state-of-the-art greenhouse, outdoor and processing facility located in Strathroy, ON as well as a fully licensed 26,000 sq. ft. Aylmer, ON processing facility, specializing in cannabis extraction. With the addition of Starseed Medicinal, a medical-centric brand, Entourage has expanded its multi-channeled distribution strategy. Starseed’s industry-first, exclusive partnership with LiUNA, the largest construction union in Canada, along with employers and union groups complements Entourage’s direct sales to medical patients. In October 2021, Entourage closed the acquisition of craft cultivator CannTx Life Sciences Inc. which operates out of its state-of-the-art micropropagation and specialty extraction facility in Guelph, Ontario. Craft brand Royal City Cannabis was added to Entourage’s elite product portfolio that includes adult-use brands Color Cannabis and Saturday Cannabis – sold across eight provincial distribution agencies. The Company also maintains strategic relationships in the seniors’ market and supply agreements with Shoppers Drug Mart. For more information, please visit us at www.entouragehealthcorp.com