REPEAT/Halo Signs Definitive Agreement to Acquire Canmart
Halo Labs Inc. (“Halo” or the “Company”) (NEO: HALO, OTCQX: AGEEF, Germany: A9KN) has entered into a definitive share purchase agreement, (the “Share Purchase Agreement”) pursuant to which the Company, in exchange for up to 72,463,768 common shares of Halo (“Halo Shares”), will acquire all of the issued and outstanding shares of Canmart Ltd. (“Canmart”), a licensed importer and distributor of cannabis-based products for medicinal use (“CBPMs”) in the United Kingdom (“UK”) (the “Acquisition”). Issuance of certain Halo Shares will be subject to milestones and, once issued, will be subject to volume trading restrictions (see “Transaction Overview” below).
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Canmart operates in a 30,000 square foot storage and distribution facility in Southeast England (Photo: Business Wire)
UK Cannabis Market Overview
The UK population consumes one of the greatest amounts of cannabis per capita in the world. With an estimated 4.7 million cannabis users out of a total general population of 66.4 million in 2019, the number of users per capita even approaches California, currently the single largest cannabis market in the world.1 While the estimated number of people in the UK who use cannabis to treat chronic health conditions is only 1.4 million,2 the legal use of medical cannabis is still in its relative infancy. The UK legalized CPBMs, including plant materials, oils, tinctures, edibles and capsules, in November 2018.
Nearly all CPBM prescriptions are imported, because there is no formal domestic manufacturing program in the UK.3 However, as legal prescriptions are on the rise,4 recent regulations have sought to streamline and ease the importation of medical cannabis to the UK. In March 2020, the Medicines & Healthcare Products Regulatory Agency (the “MHRA”) and the Home Office implemented changes that enable Canmart to import large quantities of CPBMs and hold inventory of these approved medicines. The Company’s research of publicly available information indicates that Canmart and four other companies in the UK currently possess all of the licenses necessary for bulk importation and distribution of CPBMs.