GSRX Industries is a vertically integrated cannabis company with multi-state operations and the largest medicinal cannabis dispensary network in Puerto Rico. The company has developed a retail focused approach and is currently expanding across the United States.
VANCOUVER, British Columbia, Aug. 05, 2019 (GLOBE NEWSWIRE) — Chemesis International Inc. (CSE: CSI) (OTC: CADMF) (FRA:CWAA) (the “Company” or “Chemesis”), announces that it has entered into binding share exchange agreements (the “Share Exchange Agreements”) with certain shareholders (“Selling Shareholders”) of GSRX Industries Inc. (“GSRX”) (OTCQB: GSRX) (the “Acquisition”), pursuant to which the Company will acquire an aggregate of 42,634,124 common shares and 1,000 preferred shares of GSRX, in exchange for an aggregate of 18,915,738 Chemesis common shares to be issued to the Selling Shareholders (“Chemesis Consideration Shares”). Together with the GSRX common shares already held by the Company, completion of the Acquisition will result in the Company holding an aggregate of 54,301,122 common shares and 1,000 preferred shares of GSRX. The preferred shares carry, in aggregate, 51% of all outstanding share voting rights of GSRX. Accordingly, upon completion of the Acquisition, the Company will hold an aggregate 66.29% of all outstanding share voting rights. The Chemesis Consideration Shares shall be subject to a 36-month leak out schedule.
The Company has retained INFOR Financial Inc. as a financial advisor with respect to the Acquisition. Completion of the Acquisition is expected to occur prior to August 31, 2019.
Upon acquiring a controlling interest in GSRX pursuant to the Acquisition, Chemesis will effectively be a fully vertically-integrated, multi-state operator with assets in six states which includes California, Tennessee, Arizona, Michigan, Texas, and Puerto Rico, with significantly-enhanced consolidated gross revenue projections, estimated to be approximately $75,000,000 USD for the 2020 calendar year (on a fully consolidated basis) (“Estimated Revenue Projection”).
The Company has extensive manufacturing, extraction, distribution, and processing capabilities, which complement and build upon GSRX’s proven ability to professionally operate cannabis dispensaries. Chemesis intends to leverage its facilities and processing capabilities to manufacture finished goods for GSRX’s operating dispensaries, with the aim of further increasing margins and operational efficiencies.
GSRX’s asset portfolio includes:
- Five operational dispensaries in Puerto Rico, which operate under Green Spirit Rx brand with locations in Dorado, Carolina, Hato Rey, Fajardo and San Juan.
- An additional five pre-qualified dispensaries in Puerto Rico with locations in large tourist centres and dense populations. Each dispensary is in various stages of development and construction.
- A fully licensed cannabis distribution centre in Point Arena, California. The distribution centre is expected to service over 400 dispensaries in Northern & Central California.
- The Green Room, a boutique dispensary located in Point Arena California that has been owned and operated since April 2018.
- The Green Room, a 4,500 ft2 large scale dispensary located in Palm Springs, California. The dispensary is currently undergoing renovations and expects to open by calendar Q1 2020. With over 10 million annual visitors, Palm Springs has become one of the most popular destination cites in California for tourists all over the world.
- Retail CBD stores in Texas and Tennessee, including Nashville, with products such as creams, balms, tinctures, pet products, face masks, vape pens, and soft gels.
In addition, GSRX has recently submitted a comprehensive business plan to the City of Riverbank, California, which constitutes phase one of its application for a retail location there and GSRX has also entered into a long-term lease with a landlord for 2600 square feet of building space there. Approximately 1 million residents in the surrounding communities are expected to help secure a strong customer base for both medical and adult use cannabis products.
“GSRX has built an incredibly strong portfolio of retail and manufacturing assets and the company is realizing growth in all aspects of its operations,” stated Chief Executive Officer of Chemesis, Edgar Montero. The Company is incredibly excited about this acquisition and believes it will be highly accretive in terms of the potential to realize efficiencies and complement the strengths of each company’s respective business lines.”
The Company notes that the Estimated Revenue Projection is provided in order to furnish readers with information as to the potential revenue generation potential of the Company and GSRX on a consolidated basis, as the same was an important consideration for the Company in pursuing the Acquisition and in arriving at a value for the GSRX shares being acquired. While the Company believes that the assumptions on which the Estimated Revenue Projection are based are reasonable in the circumstances, readers are reminded that the information is forward-looking in nature, and, therefore, inherently subject to uncertainty, and that such information may not be appropriate for other purposes.
This news release does not constitute an offer to sell or the solicitation of an offer to purchase any securities. The securities referenced herein may not be offered sold in the United States absent registration under the U.S. Securities Act of 1933, as amended, or an exemption therefore.
On behalf of the board of directors
CEO and Director
About Chemesis International Inc.
Chemesis International Inc. is a vertically integrated global leader in the cannabis industry, currently operating within California, Puerto Rico, and finalizing an acquisition in Colombia.
Chemesis is developing a strong foothold in key markets, from cultivation, to manufacturing, distribution and retail. Chemesis has facilities in both Puerto Rico and California, allowing for cost effective production and distribution of its products. In addition, Chemesis leverages exclusive brands and partnerships and uses the highest quality extraction methods to provide consumers with quality cannabis products.
Chemesis will add shareholder value by exploring opportunities in emerging markets while consistently delivering quality product to its consumers from seed to sale.
Forward-Looking Information: This news release contains “forward-looking information” within the meaning of applicable securities laws relating to statements regarding the Company’s business, products and future the Company’s business, its product offerings and plans for sales and marketing. Although the Company believes that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned not to place undue reliance on forward-looking information. Such forward-looking statements are subject to risks and uncertainties that may cause actual results, performance and developments to differ materially from those contemplated by these statements depending on, among other things, the risks that the Company’s products and plan will vary from those stated in this news release and the Company may not be able to carry out its business plans as expected. Except as required by law, the Company expressly disclaims any obligation and does not intend, to update any forward-looking statements or forward-looking information in this news release. Although the Company believes that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct and makes no reference to profitability based on sales reported. The statements in this news release are made as of the date of this release.
The CSE has not reviewed, approved or disapproved the content of this press release
A video accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/a2392cda-62bd-4672-b66a-cb415fa924c3