Blueberries Medical Corp. (CSE: BBM) (OTC: BBRRF) (FRA: 1OA) (the “Company” or “Blueberries“), a leading Colombia based licensed producer of medicinal cannabis and cannabis-derived products, is pleased to announce that the Company has entered into a binding agreement effective March 25, 2019 to acquire cannabis cultivation, processing, manufacturing, export and other rights in Argentina (the “Letter Agreement”) from BBV Labs Inc. (“BBV Labs”). Pursuant to a definitive agreement with the Argentinian state-owned company Cannabis Avatara, S.E. (“Cannava”), BBV Labs has entered into a joint venture (the “Joint Venture”) with Cannava to develop and cultivate cannabis on a 3.2 million square foot (74 acres or 30 hectares) prime agricultural property. Cannava will contribute the land to the Joint Venture as well as all required permits and authorizations necessary to import seeds, cultivate, grow and harvest cannabis, process cannabis and extract cannabis oil and other derivative products for scientific, medicinal and therapeutic purposes and to export cannabis and derivative products and import and export related equipment and products.
- The rights to cannabis licenses in Argentina acquired by Blueberries are amongst very few such agreements currently in place to supply cannabis products to the Argentinian population exceeding 44 million people. The acquisition also expands the Company’s production footprint internationally and may provide additional export opportunities to other countries with evolving cannabis regulations.
- Blueberries to build a large-scale modern cultivation facility and processing centre of excellence in Argentina.
- Cannava will contribute all licenses/permits and authorizations necessary to import seeds, cultivate, grow and harvest cannabis, process cannabis, extract cannabis oil and other derivative products, export cannabis and derivative products, and import/export equipment and products.
- Cannava will grant access to utilize 3.2 million square foot (74 acres or 30 hectares) of prime agricultural land for the cultivation and growth of cannabis in Jujuy Province, Argentina, ideally situated in an area with robust modern infrastructure including fresh water, modern power supply and a nearby airport, with additional land available for potential future expansion.
- Cannava will contribute all cooperation agreements with the National Institute of Agricultural Technology (INTA), Ministry of Security, Ministry of Public Health, National Council of Scientific and Technological Investigations (CONICET) and other regulatory and technological Argentinian authorities as required.
“To be one of the first and limited number of companies with rights to cannabis licenses in Argentina is a tremendous opportunity for Blueberries to further establish itself as a leading South American cannabis company and create a dominant position in these markets, stated Camilo Villalba, Chief Operating Officer. The unique position of working directly with state-owned Cannava is a privilege. We look forward to quickly scaling to meet the demand for premium medical grade cannabis and cannabis products in Argentina.”
Argentina’s relatively nascent cannabis industry began in 2017 with the legalization of cannabis for prescribed medical use. To date Cannava is the only entity authorized to cultivate and produce cannabis and derivatives in Argentina and Blueberries is among the first and limited number of companies to have such an arrangement with Cannava.
The 3.2 million square foot site is located on the El Pongo agricultural property in the province of Jujuy. The area is located in an ideal, temperate climate that permits year-round cultivation and has a skilled and efficient agricultural labor force. The El Pongo farm is an established agricultural site with an operating history of over 100 years. The property is fed by multiple rivers providing ample access to fresh water for irrigation. The power supply is modern and has capacity to scale as production capacity is increased. An international airport only 8km away is an ideal hub for import and export. The recent authorization of El Pongo as Argentina’s first, and potentially on of the world’s largest cannabis farm is expected to pave the way for a new industry in Argentina.
Terms of the Transaction
Pursuant to the terms of the Letter Agreement, Blueberries will acquire 75% of all of BBV Labs rights under the Joint-Venture with Cannava. As consideration for its interest, Blueberries will issue an aggregate of 16,000,000 common shares to BBV Labs and/or its nominees, which represents, in aggregate, approximately 12.9% of the number of issued and outstanding common shares of Blueberries (assuming no further share issuances by Blueberries before closing). The closing of the contemplated transaction is subject, among other conditions, to satisfactory legal and financial due diligence, and completion of a definitive share purchase agreement and is expected to close in Q2 2019.
Pursuant to the Joint Venture Agreement, proceeds from the manufacture and distribution activities will be distributed 90% to BBV Labs and 10% to Cannava and proceeds from the cultivation and growth activities will be distributed 70% to BBV Labs and 30% to Cannava. Going forward, Blueberries will be responsible for providing the expertise and capital required to operate and develop the Joint Venture operation. The Letter Agreement was negotiated at arm’s length.
About Blueberries Medical Corp.
Blueberries is a Colombia-based licensed producer of naturally grown premium quality cannabis with its primary operations ideally located in the Bogotá Savannah of central Colombia. Led by a specialized team with proprietary expertise in agriculture, genetics, extraction, medicine, pharmacology and marketing, Blueberries is fully licensed for the cultivation, production, domestic distribution, and international export of CBD and THC-based medical cannabis. Blueberries’ combination of leading scientific expertise, agricultural advantages and distribution arrangements has positioned the Company to become a leading international supplier of naturally grown, processed, and standardized medicinal-grade cannabis oil extracts and related products.