TORONTO, Sept. 14, 2017 (GLOBE NEWSWIRE) -- Quinsam Capital Corp. ("Quinsam") (CSE:QCA) in May announced its intention to acquire High Standard Royalty Co. (“High Standard”). High Standard has entered into a Letter of Intent (the "Letter of Intent") with Herbiculture Inc. (“Herbiculture”) dated July 20, 2017, to finance the startup costs of establishing a medical marijuana dispensary located in Burtonsville, Maryland (the “Financing”). The Financing will be in the form of a US$655,000 senior secured promissory note carrying an interest rate of 10% with a 3-year term. Herbiculture will also issue to High Standard a 35% equity "kicker" for nominal consideration.
In addition, Herbiculture is currently 4th in line to receive a marijuana processor license (the “Processor License”) issued by the Maryland Medical Cannabis Commission. If Herbiculture is successful in securing the Processor License, High Standard will have the right to finance 100% of the funds required to establish marijuana processing operations in the form of a senior secured promissory note (the “Processor Note”) with the following terms:
- High Standard will receive 75% of net income derived from marijuana processing up until the Processor Note has been repaid + a 10% IRR; and
- High Standard will receive a 51% ownership interest in the marijuana processing operation.
Peter Bilodeau, President of High Standard, commented that “our investment in support of Herbiculture’s mission and operations offers the potential for High Standard to realize significant cash flows if the dispensary and processing operations are fully built out and commence sales. We believe Herbiculture is well positioned in the medical marijuana market, given the strategic location of its license and the fact that it will be one of only two licensed dispensaries operating in the most populous county in Maryland. We expect Herbiculture to have a first mover advantage and be able to capitalize on the robust growth from the anticipated demand as the cannabis market in Maryland develops.”
Due to the due diligence process and other conditions of the respective deals, there is no assurance that the Herbiculture financing will close and there is no assurance that Quinsam will close its acquisition of High Standard.
About Quinsam Capital Corporation
Quinsam is a merchant bank based in Canada. Our merchant banking business may encompass a range of activities including acquisitions, advisory services, lending activities and portfolio investments. Quinsam invests its capital for its own account in assets, companies or projects which we believe are undervalued and where we see a viable plan for unlocking such value. We do not invest on behalf of any third party and we do not offer investment advice.
Generally, Quinsam does not believe that individual investments are material reportable events. Quinsam chooses to announce certain investments once the company is certain that it has finished buying its position because the Company feels that this information helps Quinsam's investors understand its investment decision making process. Generally, Quinsam does not announce the sale of investments.
For further information please contact:
John Lewis, Business Development
(416) 523-7086
john@quinsamcapital.com
Eric Szustak, President
(905) 330-7948
eric@quinsamcapital.com
Roger Dent, CEO
(647) 993-5475
roger@quinsamcapital.com
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