Medcolcanna Executes Definitive Agreement for Joint Venture and extends LOI for Investment into Extraction Subsidiary - Seite 2

Mr. de la Vega continued, “Dona Blanca conducted very meticulous and careful due diligence, including multiple site visits to our facilities, where they spent many days working closely with our team and supervising our processes, leaving them confident with the operations, the MCCN team and the plan to expand the cultivation facilities.”

Mr. de la Vega further added, “By increasing our area of cultivation, both MCCN and Dona Blanca will benefit from fixed costs that will now be spread over a larger cultivation area as well as other cost saving synergies and economies of scale. The additional benefit MCCN and its shareholders will receive is the non-dilutive financing of a 30% working interest that requires no capital investment from MCCN, but is awarded to MCCN to operate the project.”

“We are pleased to execute this definitive agreement as well as the amended LOI. Dona Blanca has already funded the first stage or 50% of the definitive agreement. They also maintain a high level of interest in investing in Extralia Labs, by paying an additional non-refundable deposit and increasing their option to invest to a total of $2,500,000.  We look forward to working with Dona Blanca in order to meet their extended deadline of October 15, 2020 for investment.  We are very pleased to close this non-dilutive financing during this period of COVID-19. Medcolcanna continues to operate and execute during this period however MCCN’s priority is the health and safety of its employees, partners and the community. Additionally during this period we have seen the depreciation since the last reporting period of the Colombian Peso to the Canadian and United States Dollar, of 10% and 16% respectively, which will further decrease MCCN’s cost of production,” commented Chris Reid CFO of MCCN.

“Dona Blanca is pleased to execute the definitive agreement and extend the LOI on its investment in Extralia Labs. Following our multiple visits to the Medcolcanna facilities and meeting its professional management team and employees, Dona Blanca is very pleased to finalize our Joint Venture with Medcolcanna as we now get access to its world class cultivation facilities in Cota, Colombia. Dona Blanca is also pleased to extend our agreement regarding Extralia Labs,  a third-party extraction facility that is expected to be a leading facility in Colombia, which will have four different state-of-the-art extraction methods. We continue to move forward during the COVID-19 period, and our shareholders and stakeholders remain committed and positive on the industry’s outlook, are we are very pleased to partner with MCCN, and look forward to obtaining the necessary financing to close on the Extralia Labs investment,” added Rob Dzisiak, Managing Director of Dona Blanca.