FinCanna Capital Corp. (OTC: FNNZF) (CSE: CALI), have entered into a royalty agreement with Green Compliance, Inc. (“Green Compliance”). Green Compliance, headquartered in Fort Lauderdale, Florida, offers a state-of-the-art enterprise compliance and point-of-sale software solution (“ezGreen”) for licensed medical cannabis dispensaries and cultivators. Green Compliance helps its customers comply with both the Health Insurance Portability and Accountability Act (“HIPAA”) and State Laws by ensuring patients’ confidential data is being handled properly, helping to protect from possible security breaches and financial and criminal liability resulting from potential violations.
Green Compliance has commenced sales in the United States, and its target market is every licensed operating dispensary and cultivator in the states which have passed laws legalizing medical cannabis - currently 29 states and Washington, D.C. Its ezGreen compliance software offers a security and HIPAA compliance strategy for dispensaries operating with valid licenses within their respective states. Most dispensaries use a seed-to-sale solution, and ezGreen has the flexibility to integrate as a plug-in with any existing seed-to-sale software or it can operate as a stand-alone point-of-sale system.
FinCanna CEO, Andriyko Herchak, comments, “We are building a diversified portfolio of royalty investments in companies that have the potential to be the leaders in their respective sectors of the licensed medical cannabis industry. Green Compliance, with its deep-rooted experience in compliance software and medical cannabis industry expertise, is an ideal addition to our royalty portfolio. Green Compliance has already commenced sales, and we expect our royalties to commence in the near future, with a tremendous opportunity for growth across all 29 U.S. states and Washington D.C. which have legalized medical cannabis.“
Green Compliance has an exclusive licensing and support agreement with Automated Healthcare Solutions (“AHCS”) to market and sell ezGreen compliance software. AHCS is a leading point of care tracking and dispensing software solution in the U.S. dedicated to the workers compensation vertical in the pharmaceutical industry, and a proven HIPAA compliant solution. AHCS supports thousands of active physicians that dispense medication onsite and has tracked, monitored, reported, and protected patient information for the past 16 years across thousands of physician practices, while maintaining HIPAA compliance and following Health and Human Services protocols in the United States.
Together, AHCS and Green Compliance developed ezGreen compliance software to offer similar compliance guidelines, standards, and disciplines at the U.S. state level to the licensed medical cannabis industry as is done in the pharmaceutical industry. The ezGreen compliance software includes a suite of tools including state-by-state compliance, tracking, reporting, point-of-sale dispensing and product verification services.
HIPAA is one of the most significant medical data handling regulation systems in the United States. It has become the template for establishing regulatory requirements for all other industries in regard to handling sensitive patient information. HIPAA regulations have become more stringent due to the substantial increase in identity theft in recent years.
To ensure enforcement of these regulatory requirements, HIPAA is now in the secondary phase of auditing medical organizations which has resulted in over $75 million in fines to date. The penalties for noncompliance are based on the level of negligence and can reach $50,000 per violation (or per record), with a maximum penalty of $1.5 million per year for violations of an identical provision. Violations can also carry criminal charges that can result in jail time. Almost 90% of healthcare organizations have experienced a data breach in the past 24 months with 45% of those experiencing five or more breaches in that period of time.
Under the Royalty Agreement, FinCanna will fund US$3 million in tranches by September 15, 2018. In return, FinCanna will receive a perpetual royalty equal to 10% of consolidated gross revenues of Green Compliance, subject to certain buy-back options.
Green Compliance has also partnered with Chameleon Collective, a strategy-based agency that drives marketing, business development, and innovation across the media, retail, and technology sectors. Chameleon Collective was founded by senior executives, marketers, technologists, entrepreneurs, and change-makers that also have a deep cannabis industry network. Chameleon Collective will help drive marketing, business development and innovation across the media, retail and technology sectors for Green Compliance on a U.S. national level.
FinCanna CEO, Andriyko Herchak, adds, “Partnering with Green Compliance and Chameleon Collective is a very strategic opportunity to increase our presence across the U.S., help fund best-in-class companies and projects, and expand our diversified portfolio of royalty investments. Excelling at compliance solutions and building strong relationships with its customer base and with regulators will be an effective way for Green Compliance to become a trusted provider and open doors for a number of additional growth opportunities.”
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