LGC Capital Closes Investment in Swiss Cannabis Producer, Viridi Unit SA

Published: December 12, 2018

LGC Capital Closes Investment in Swiss Cannabis Producer, Viridi Unit SA

LGC Capital Ltd. has closed its previously announced transaction with Swiss cannabis producer, Viridi Unit SA. LGC has issued 35,167,001 shares of its common stock at a price of $0.1143 each to Viridi in exchange for a 30% equity interest in Viridi plus a 5% royalty on Viridi’s net sales over ten years. All final documentation in respect of the transaction will be submitted today to the TSX Venture Exchange.

John McMullen, CEO of LGC stated, “The LGC team and I are very pleased with the closing of our strategic investment in Viridi. With partners like Viridi in Switzerland, we at LGC are solidifying our presence in the legal European cannabis market which is estimated to grow upwards of $98 billion by 2025 according to a recent BMO report. As the cannabis market grows rapidly inside Switzerland and the European Union, Viridi and its ØNΞ Premium Cannabis are building a strong name as a leading provider of high quality, high CBD, compliant cannabis products in Europe.

Viridi produces, processes, and distributes high-CBD legal cannabis products under the ØNΞ Premium Cannabis brand in over 500 retail locations across Switzerland. Recently in October, LGC announced that Viridi had harvested and processed 20,000 plants that were growing at their Geneva cannabis cultivation facility, consisting of 65,000 square feet of canopy space. This recent harvest yielded 2,700 kg of high-CBD dried cannabis flowers to be used as inputs to the ØNΞ Premium Cannabis products as well as for wholesale markets across Europe.

Viridi uses a proprietary breeding system for its high quality, high-CBD strains and seeds that comply with the Swiss regulations of <1% THC and European Union regulations of <0.02% THC. Viridi will also be launching its CBD cosmetics line called Viridi Care for the global market in early 2019.
On August 1, 2018, LGC announced a binding agreement to acquire a 30% interest in Viridi, a vertically integrated legal cannabis supplier to the Swiss and European markets. Under the terms of the agreement, LGC has acquired its 30% interest through the issuance to Viridi of 35,167,001 common shares of LGC at an issue price of $0.1143 each for a total consideration corresponding to CHF 3 million ($4,019,588.22). The number of shares issued is based on the 5-day VWAP of LGC’s common shares at close of markets on December 5, 2018. The shares issued to Viridi represent approximately 8.45% of the number of issued and outstanding LGC shares on a post-closing basis.

LGC has also been granted a 5% royalty on Viridi’s net sales for a period of ten years. For this transaction, LGC has paid a finder’s fee to an arm’s length party equal to 3% of the total consideration in cash and 2% of the total consideration by the issuance of 703,340 common shares of LGC.

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