December 6, 2021 at 17:12 EST | Source: Hoist Capital Corp. Hoist Capital Corp.
Calgary, Alberta, December 6, 2021 (Global News Service)-Hoist Capital Corp. (TSX: HTE.P) ("Hoist") and The Hempshire Group, Inc. ("Hempshire "Or "Company"), a private, non-tobacco and non-nicotine smoking alternative company headquartered in Palm Springs, California and incorporated under the laws of Wyoming, is pleased to announce that they have completed December 5, 2021 A definitive merger agreement ("Agreement") has been signed that provides for business merger transactions.
Pursuant to the agreement, Hoist will: (i) Acquire every common share issued and outstanding in Hempshire Capital ("Hempshire Shares") in exchange for the issuance of 26.0 common shares in Hoist Capital ("Hoist Shares") ") At a determined price of CAD 0.10 per share of Hulu (before the merger takes effect (see below for definition)); (ii) Completion of the business combination with Hempshire (collectively referred to as the "transaction"). This transaction will constitute a qualifying transaction for Hoist This term is defined in the TSX Risk Exchange ("Exchange") Corporate Finance Manual Policy 2.4. Hulu is far from Hempshire. The transaction must be completed at a price of 2.05 Canadian dollars per unit of Hempshire units ("units"). Brokerage private placement, minimum total income of 3 million Canadian dollars, maximum total income of 5 million Canadian dollars ("private placement"). Placement) and customary closing conditions, including exchange approval.
After the transaction is completed, the issuer resulting from the merger of Hoist and Hempshire (the "ultimate issuer") will be positioned as the market leader in non-tobacco and non-nicotine smoking alternatives, and will continue its current business in accordance with the exchange’s policy, Hempshire acts as the publisher of Tier 2 Life Sciences.
Ultimately, the issuer will be led by Hempshire's existing management team, which consists of: Martin Marion (President, CEO and Director); Eric Starr (Chief Marketing Officer); and Tom Schumann (Chief Operating Officer). After the transaction is completed, the final issuer’s board of directors will be composed of Martin Marion, Jeff Ragovin, Gail Hannon and Samuel Isaac.
Hempshire’s leadership team includes senior executives who play an important role in building iconic global brands in advertising, marketing, strategy and competitive advantage, as well as direct-to-consumer ("D2C") and business-to-business ("B2B") markets .
Hempshire was established in 2019 to develop and sell its own proprietary brand under the brand name MOUNTAIN® Smokes, including MOUNTAIN® Originals hemp smoke ("CBD Hemp Smokes") containing <0.3% THC and non-detectable, <0.0001 % THC, and other proprietary brands are being developed. Hempshire also provides private white label services and contract manufacturing services for the important non-owned CBD Hemp Smoke brand in the United States and internationally through its partners.
Hempshire's products are now distributed internationally in Switzerland and South Africa. The company has received its first purchase order from New Zealand and is discussing distribution in a number of other jurisdictions, including Puerto Rico, Australia, Mexico, the United Kingdom, and various countries in the European Union, South and Central America.
Ultimate issuer's management team
After the transaction is completed, the final issuer’s management team is expected to include the following personnel:
Martin Marion is the President, Chief Executive Officer and Director. He is from Irvine, California. He used to be a senior executive of two leading advertising companies, Gray Advertising / Gray Direct and D'Arcy Masius Benton & Bowles (DMB&B). Martin has more than 35 years of experience as an executive consultant for many global brands, mainly in the areas of consumer products ("CPG"), retail, health products and digital electronic products to advise customers on product launches and market competition strategies. Commercial areas. He has expertise in health products and CPG brand positioning, product launches and competitive advantage strategies.
Eric Starr, Chief Marketing Officer from Los Angeles, California, has more than 17 years of marketing and branding experience. He served as the creative strategy director of the Media Art Lab in the advertising agency of Apple Inc., helping to launch the iPod, build the Mac brand, and launch the iPhone and iPad. His work has won honors, including advertising campaigns: "I am a Mac, I am a PC", won the "Ten Years of Sports", the iPod Silhouette won the "Ten Years of Outdoor Sports", and the agency Eric won the "Ten Years of Outdoor Sports" Agent" title.
Tom Shuman, chief operating officer from Dallas, Texas, brings more than 30 years of experience in leading CPG sales and marketing teams. He is both a founder and an executive in various roles. He has extensive work experience throughout the sales chain, including working with brokers, distributors, wholesalers and retailers from companies such as Procter & Gamble, Coca-Cola and Dr Pepper/SevenUp.
Hempshire was founded by Dan Iannotte, a veteran in the cannabis and cannabis industry with more than 30 years of experience. His knowledge and understanding of the industry enable Hempshire to source the highest quality supply inputs and plan products to provide users with a very ideal and pleasant experience. Mr. Iannotte holds approximately 56% of the issued Hempshire shares.
Hempshire is currently discussing with many candidates for the position of chief financial officer and will announce the appointment of chief financial officer at the same time as the transaction is completed.
The company's first product line is branded under the MOUNTAIN® Originals label and consists of 20 SKUs, including Natural, Mint Squeeze™ and Pineapple Squeeze™ flavors, and have different levels of CBD content. This product contains only organic hemp flower, organic mullein and organic sage, without fillers, preservatives or added chemicals. The appearance, touch, burning and packaging of MOUNTAIN® Smokes are like cigarettes, providing all the ritual pleasures that smokers have been accustomed to, but without the harmful effects and addictive properties of tobacco and nicotine, and without any additives or chemical preservatives. Hempshire encourages consumers and investors to conduct their own consumer experience comparison taste tests against other competing products and alternatives.
Hempshire also recently launched the MOUNTAIN® Zeros™ series, a CBD cannabis cigarette with undetectable (<0.0001%) THC levels, and is developing other CBD cannabis cigarettes with different CBD levels, as well as a herbal smoking series. Address a series of regulations on smoking alternatives to tobacco and nicotine in jurisdictions around the world. 15 SKUs with different MOUNTAIN® Zeros™ flavors and size combinations are being launched globally. MOUNTAIN® Zeros™ will also be launched in the United States for those who may need CBD cannabis smoke without the risk of testing positive for THC.
Omni-channel organic marketing and data-driven strategic paid advertising, coupled with the participation of influencers and social media, are key drivers for Hempshire, as it hopes to provide better services to millions of tobacco smokers, e-cigarettes and e-cigarette users Alternatives to CBD, and consumers of CBD. To date, the company's MOUNTAIN® Smokes products have been showcased in social media posts by hundreds of important influencers from the music, TV/movie, and social media industries. These posts were published without any paid endorsements. MOUNTAIN® Smokes is also the first smoking product to be advertised in national or international publications since the U.S. Congress banned Big Tobacco in 1970, and the first cannabis brand to be advertised in national magazine publications.
MOUNTAIN® Smokes appeared in the four-page cover package of the June 2021 edition of Fortune magazine, as shown below, with its "This is not a cigarette™" campaign.
The company’s products are sold through D2C through the MountainSmokes.com website. The website is currently undergoing a comprehensive transformation to become a fully functional and conversion-optimized e-commerce website that can enhance customer experience, introduce the MOUNTAIN® Zeros™ product line, and launch important loyalty Incentive program and integrated a private portal for wholesalers, distributors and retailers' sales.
In addition to D2C marketing, Hempshire also attaches great importance to B2B through wholesale distributors and retailers in the United States and the world, with special attention to retail convenience stores ("C stores"), smokers and pharmacies. Hempshire is also the preferred supplier of new product categories officially recommended by AATAC, one of the largest independent convenience store and gas station trade associations in the United States, and has a network of more than 80,000 C-store locations.
Hempshire has established the foundation and infrastructure to become a global leader in the market for non-tobacco and non-nicotine smoking alternatives.
In addition to the emerging international market for CBD and herbal inhalable products, the company has also identified and targeted three specific current global market segments with a total annualized expenditure of more than 1.0 trillion Canadian dollars.
The global tobacco market of $932.1 billion. [1]
Hempshire smokables provides smokers with the same familiar consumer experience and rituals. These experiences and rituals have contributed to the huge appeal of smoking to individuals and society-their appearance, feel, burning and smoking are all like a tobacco cigarette, packaged in The same familiar foils and cartons, in most jurisdictions, can be sold wherever tobacco cigarettes are available. However, they are absolutely free of tobacco and nicotine, are not addictive, are made of 100% organic ingredients, and usually have a lower retail price. Users like the healthier CBD alternative in Hempshire's MOUNTAIN® Smokes, CBD Hemp Smokes.
Due to its huge size, changing user preferences, and tightening government regulations, the tobacco market is of particular interest and importance to Hempshire. These changes are highlighted in the following statement taken from the British American Tobacco website in September 2021:
"As health and wellness become more and more important, generational differences and changes in taste are continuing to emerge. We expect the growth of new product categories, including tobacco and nicotine. Consumers expect these products to provide stimulation and pleasure. Cigarette-related methods. We believe this growth will offset the expected decline in cigarette consumption."
The company believes that the category of non-tobacco alternatives and Hempshire will greatly benefit from the changing paradigm of the traditional smoker market.
2. The global e-cigarette and e-cigarette market of $12.4 billion. [2]
As studies have shown that these nicotine-based products are safer alternatives to traditional cigarettes, and the social psychology surrounding e-cigarettes, the demand for e-cigarettes and e-cigarettes continues to grow. The compound annual growth rate is expected to exceed 23% by 20272, and this market is driven by a generation younger than traditional smokers. However, local authorities in many countries continue to restrict e-cigarettes and flavored nicotine e-cigarette juices, which provides important opportunities for Hempshire's smoking alternatives. Hempshire’s MOUNTAIN® Smokes provide e-cigarette and vape users with the same hand-to-mouth experience. They are also available in a variety of flavors and can be sold in the same convenient location, but they do not contain addictive nicotine or other harmful chemicals. , It is lower cost and more environmentally friendly.
3. The global CBD market of USD 2.8 billion. [3]
Due to strong demand for health and wellness purposes and increased government acceptance, the global CBD market is expected to expand at a compound annual growth rate of 21% from 2021 to 20283. Hempshire's CBD Hemp Smokes provides a form of consumption for consumers seeking CBD. The cost per CBD dose is relatively low, and the bioavailability is higher than most topical drugs and ingestible.
Hempshire has cooperated with certain service providers, including a number of organic hemp farmers in the United States, who strictly implement organic farming and fully comply with the U.S. Agriculture Improvement Act of 2018 ("US Department of Agriculture 2018 Farm Act") to ensure continuous supply The best quality CBD-rich organic hemp flowers, and provide manufacturing and packaging services. This has allowed and is expected to continue to allow Hempshire to expand with minimal additional capital investment. Hempshire currently has a manufacturing capacity of 1,500,000 cigarettes per day and can quickly expand with minimal additional capital expenditures.
The expected result is to promote Hempshire's high gross profit margin while fulfilling its commitment to the use of high-quality plant materials and genetics, rather than using by-products or undesirable residues from processed plants to make low-cost products.
Since its establishment, environmental sustainability and social responsibility have been Hempshire's guiding principles. Its "earth first" business approach covers everything from "seeds to sales". Hempshire has been purchasing ingredients grown in accordance with organic agreements to ensure that nutrient loss does not damage the ecosystem, and each farm uses its own organic fertilizer program without introducing synthetic nutrients, heavy metals or pesticides. Hempshire's cartons and most filters are biodegradable, its printing uses soy-based ink, and its biodegradable tube comes from organic roll paper.
The U.S. Department of Agriculture's 2018 Farm Bill resulted in hemp and its components (THC content <0.3%) being excluded from the definition of hemp and removed from the United States' Controlled Substances Act. It is understood that CBD-rich hemp products grown in accordance with regulatory requirements will not have any mental impact.
Ultimately, the issuer will not produce or sell medicinal or recreational cannabis or products derived from high-THC cannabis plants. Eventually, the issuer will only sell cannabis-derived products that comply with the regulatory framework in various states in the United States, and is creating a variety of alternative formulations to meet the legal regulatory restrictions on THC and CBD in multiple international jurisdictions.
Hempshire will complete a non-brokered private placement of up to 2,439,025 units at the same time as the transaction is completed and at a price of 2.05 Canadian dollars per unit. The transaction is expected to be completed in February 2022.
Each unit will consist of one Hempshire share and one Hempshire share purchase warrant (each, "Hempshire Warrant"). Each Hempshire warrant will authorize its holder to purchase one Hempshire share at an exercise price of CAD 4.00 per Hempshire share at any time within two years of the issue date, provided that if Hempshire is at any time before the expiry date Warrants, the volume-weighted average trading price of Hempshire shares on such major exchanges where Hempshire shares are listed is higher than $8.00 for twenty (20) consecutive trading days, and Hempshire can do this within ten (10) business days For such events, a notice is issued to Hempshire warrant holders to expedite the expiry date of the Hempshire warrant to thirty (30) days after the date of such notice ("Expedited Exercise Period"). Any unexercised Hempshire warrants will automatically expire at the end of the accelerated exercise period.
Private placement will not lead to the creation of a new issuer's controller. There is no need to pay finder fees or commissions for private placements.
The net proceeds from the private placement will be used to fund marketing and sales plans, as well as working capital requirements and other general corporate purposes of the final issuer.
Hoist expects that the transaction will be exempt from the exchange’s sponsorship requirements, or may be exempt. However, there is no guarantee that the exemption or exemption required by the sponsor can be obtained or will be obtained.
Ultimate issuer's board of directors
After the transaction is completed, it is expected that the issuer’s board of directors will include Martin Marion and the following independent directors:
Everleaf Capital Corp. acted as Hempshire's strategic advisor on the transaction. Stikeman Elliott LLP served as Hempshire's legal counsel on transactions and private placements, and will act as the ultimate issuer's legal counsel after the transaction is completed.
The completion of the transaction depends on the fulfillment of a number of conditions, including but not limited to: (i) All conditions under the agreement have been fulfilled or waived, including the completion of private placement; (ii) All other required regulatory, government, and Third party approval.
As far as the transaction is concerned, Hoist’s shareholders will be required to approve (among other things) at a special meeting held for this purpose: (i) change the name of the final issuer to “The Hempshire Group, Inc.”; (ii) based on the most For every five (5) shares of pre-merger common stock ("merger"), the merged common stock merges the common stock of the final issuer.
According to the policy of the Stock Exchange, this transaction does not require the approval of Hoist shareholders. If any of the above conditions are not fulfilled or the transaction does not proceed, Hoist will notify its shareholders.
Upon completion of the transaction, Everleaf Capital Corp., which is the fair trader of Hoist and Hempshire, will be entitled to collect consulting fees in the form of a unit equivalent to 5% of the value of Hempshire’s equity under the qualifying transaction, plus an additional 200,000 unit.
Hoist is a company incorporated under the laws of Alberta, Canada, and operates as a capital pool company in accordance with Exchange Policy 2.4. Except as specifically provided in Policy 2.4, Hoist will not conduct business until its qualifying transaction is completed, except for the identification and evaluation of business or assets in order to complete the proposed qualifying transaction.
About Hempshire Group, Inc.
Hempshire's current executives and directors are as follows: Martin Marion (President, CEO and Director); Eric Starr (Chief Marketing Officer); Tom Shuman (Chief Operating Officer); and Dan Iannotte (Director).
As of the date of this press release, 10,325,800 Hempshire shares, 292,800 warrants have been used to acquire Hempshire shares and issued and outstanding convertible bonds with a principal of $600,000. As a group, as of the date of this agreement, Hempshire’s directors and senior management directly or indirectly own or control 6,739,000 Hempshire shares, representing approximately 65% of the issued and circulating Hempshire shares.
Other information about the transaction, Hempshire, the ultimate issuer, Hempshire's financial statements after the transaction becomes effective, and the pro forma financial statements of the ultimate issuer will be made publicly available at www.sedar.com in due course in accordance with the filing statement to be filed on SEDAR. Hoist will also issue subsequent press releases in due course to meet the remaining requirements under Policy 2.4 to provide full disclosures related to eligible transactions.
For more information, please contact:
The completion of the transaction is subject to a number of conditions, including but not limited to the acceptance of the exchange and (if applicable according to the requirements of the exchange), the approval of the majority of minority shareholders. Where applicable, the transaction cannot be completed until the required shareholder approval is obtained. There is no guarantee that the transaction will be completed as recommended or will not be completed at all.
Investors please note that unless disclosed in the transaction-related management information notice or filing statement, any information related to the transaction published or received may be inaccurate or incomplete and should not be relied upon. Securities transactions of capital pool companies should be considered highly speculative.
This press release is not an offer of securities for sale in the United States. The securities are not registered under the revised U.S. Securities Act of 1933 and cannot be offered or sold in the U.S. without registration or registration exemption. This press release does not constitute an offer to sell or an invitation to buy, nor may it sell securities in any state where such an offer, invitation or sale is illegal.
TSX Venture Exchange Inc. did not communicate the advantages of the proposed transaction in any way, nor did it approve or disapprove the content of this press release. TSX Venture Exchange Inc. assumes no responsibility for the adequacy or accuracy of this press release.
This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. Use any words in "expect", "anticipate", "continue", "estimate", "target", "progress", "may", "will", "plan", "should", "believe", "Plans," "intends," and similar expressions are intended to identify forward-looking information or statements. More specifically, but not limited to, this press release contains forward-looking statements and information about the transaction, the completion and timing of the transaction, private placement, the completion and timing of the private placement, the use of private equity proceeds, the ultimate issuer’s corporate strategy, and the transaction information expected profit. This press release also contains forward-looking statements and information regarding the following: the ultimate issuer’s business, strategy, expectations, planned operations and future actions; the ultimate issuer’s intentions and capabilities to develop its business, operations and product offerings, including branded products And private brands; the competitive conditions of the final issuer’s industry and the final issuer’s competitive advantage; expectations of growth rates, growth plans and strategies; management team and its performance; the final issuer’s commitment to environmental, social and governance principles The final issuer’s competition and business strategy; the final issuer’s business in the United States, and the characteristics and consequences of these businesses under US federal laws and applicable state laws, as well as the implementation framework of applicable laws in the United States and internationally; and the final issuance The overall economic, financial market, regulatory and political conditions of human operations.
Forward-looking statements and information are based on certain key expectations and assumptions made by Hoist, including expectations and assumptions about: Hoist, Hempshire and the resulting issuers; private placements; transactions, including satisfying (i) all necessary regulations , Government and third-party approvals, and (ii) all other closing conditions in accordance with the terms of the agreement; the securities market and general business and economic conditions, including the continuing impact of COVID-19; the final issuer’s future operations and completed transactions, including its The ability to successfully implement its growth strategy and business plan; have sufficient capital; obtain financing on reasonable terms; the ultimate issuer's ability to attract and retain qualified personnel; the ultimate issuer's ability to protect its intellectual property rights; the ultimate issuer and its customers , The ability of suppliers, service providers and other third parties to maintain strong business relationships; the ultimate issuer’s ability to keep up with changing consumer preferences; the ultimate issuer’s ability to operate and the ability to continue business in the regulatory environment that may operate in the future ; And the applicable law has not changed in a way that is detrimental to the ultimate issuer. Readers should note that the above list does not exhaustively list all the factors and assumptions that have been used.
Although Hoist believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, it should not rely excessively on forward-looking statements and information because Hoistcan does not guarantee that they will prove to be correct. By its nature, such forward-looking information is subject to inherent risks and uncertainties, which may cause actual results and expectations to differ materially from the expected results or expectations expressed. These risks and uncertainties include, but are not limited to: the inability of the parties to obtain the approval of the exchange; the general risks associated with the hemp or hemp industry; the size of the emerging industrial hemp market; the restrictions on marketing products; the risks inherent in the agricultural business; the federal government The actions and actions of the provincial government and changes in government policies and the implementation and impact of these actions, actions and policies; the final issuer’s interpretation and changes to federal and state laws related to hemp; errors in the U.S. Agricultural Improvement Act of 2018 Interpretation; international regulatory risks; uncertainty caused by potential changes in the regulatory framework; regulatory approvals and permits; environmental, health and safety laws; anti-money laundering laws and regulations; banking affairs; ability to obtain public and private capital and banking services; denials Certain expenses; responsibility for the actions of employees, contractors, and consultants; product feasibility; accuracy of quality control systems; product recalls, product liability, and product returns; positive tests for THC or prohibited substances; supply risks; dependence on third parties Suppliers, service providers, and distributors; failure of counterparties to fulfill contractual obligations; industry and intra-industry competition; changing consumer preferences and customer retention rates; unfavorable publicity or consumer perception; inability to maintain pricing models; reliance Key investment; effectiveness and efficiency of advertising and promotional expenditures; retention and recruitment of key officials and employees; inability to renew major leases; obtaining insurance; growth management; risks associated with acquiring companies and establishing partnerships; infringement of intellectual property rights; failure to protect Intellectual property; intellectual property claims; litigation; trade secrets may be difficult to protect; data security breaches; global economic uncertainty; emerging industries; limited securities markets; financial reporting and listed company obligations; Other factors more fully described in reports and documents submitted by regulatory agencies.
In addition, Hoist warned that the current global uncertainty regarding the spread of the COVID-19 virus and its impact on the wider global economy may have a significant negative impact on the final issuer. Although the exact impact of the COVID-19 virus on Hoist, Hempshire and the resulting issuers is still unknown, the rapid spread of the COVID-19 virus may continue to have a significant adverse impact on global economic activities and may continue to cause volatility and global supply chains , Operations, personnel flows, and financial market disruptions, which may affect interest rates, credit ratings, credit risks, inflation, business, financial conditions, results of operations, and other factors related to the ultimate issuer.
Readers are reminded that although the assumptions used in preparing forward-looking information are considered reasonable at the time of preparation, they may prove to be inaccurate. Actual results, performance or achievements may differ materially from those expressed or implied in these forward-looking statements, and there is no guarantee that such expectations will be realized. Unless required by law, Hoist assumes no obligation to publicly update or modify any forward-looking information, whether due to new information, future events, or other reasons. The forward-looking information contained herein is expressly limited by this warning statement.
Certain information contained herein was obtained from public sources prepared by independent industry analysts and third-party sources (including industry publications, surveys, and forecasts), including certain reports issued by Grand View Research, Inc. Although this information is believed to be reliable for the purposes of its use here, Hoist and Hempshire assume no responsibility for the accuracy of such information. Some of the sources cited in this press release did not agree to include any data in their reports, and Hoist or Hempshire did not seek their consent.
[1] Grand View Research, Inc. "Tobacco market size, share and trend analysis report by product (smokeless, cigarettes, cigars and cigarillos, next-generation products, hookah), by region, and from 2021 to 2028 Market segment forecast for the year." February 2021.
[2] Grand View Research, Inc. "E-cigarette and e-cigarette market size, sharing and trend analysis report, forecast by product (disposable, rechargeable), component (Vape Mod, e-liquid), distribution channel and market segment , 2020-2027." February 2020.
[3] Grand View Research, Inc. "By source type (marijuana, cannabis), by distribution channel (B2B, B2C), by end use (medical, personal use), by region, cannabidiol market size, share and Trend analysis report, and market segment forecasts from 2021 to 2028." February 2021.
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