Halo Labs Inc (OTCMKTS:AGEEF) agreed to extend the time for the binding LOI (Letter Of Intent) to take over Canmart Limited because of ongoing coronavirus crisis. Both companies get sufficient time to negotiate terms of the definitive agreement and conduct due diligence. Halo expects to sign the final SPA and conclude the deal on or before July 15, 2020.
Halo will pay CAD 6 million to Canmart
Halo will issue common shares worth CAD 6 million at CAD 0.35 for each share subject to Canmart, achieving significant milestones in its business.
Highlights of transaction
Halo will acquire a 100% stake in Canmart; the UK based engaged in importing and distributing cannabis-derived products for medical use. In South-Eastern England, Canmart maintains 30,000 Sq. Ft. MHRA certified third-party logistics warehouse. MHRA already granted special and wholesale distribution licenses to Canmart. The company approached the Home Office to obtain controlled drugs license for the import and distribution of cannabis-based medical-use products.
Home Office visited the warehouse facility of Canmart to assess security arrangements and suitability. The agency said Canmart successfully passed all the tests.
The takeover of Canmart positions Halo, a leading player in the importing and supply of medicinal cannabis in the UK. In 2020, Halo expects to commence the export of medicinal products from Bophelo to the UK on receipt of MHRA approval.
The market for cannabis in the UK
The UK’s cannabis demand expects to accelerate this year and will reach $1.3 billion by the year 2024. In 2019, the demand for medical prescriptions surged to 6,883 in the UK. Unregulated channels supplied medical cannabis to 1.3 million patients. The clinic chains will increase to 7 in 2020 from 4 in 2019.
The prescriptions for medical-use products rose to 12,000 in 2020 and expect to grow over 30,000 soon. Recreational use and cannabidiol products will contribute to significant growth in the UK market.
Co-founder and CEO of Halo, Kiran Sidhu, said the markets in the nation are opening slowly. It will expedite closing the Canmart takeover.
Halo issues 12.04 million common shares to independent consultants. It considered the closing price of the share at CAD 0.10 as of May 26, 2020. The company also issued 25.4 million options to some employees on May 27, 2020.