Signs Memorandum of Understanding for Formation of Joint Venture with Canadian Partner to Manufacture and Distribute Hourglass Products in Canada
LOS ANGELES and DESERT HOT SPRINGS, Calif., March 01, 2021 (GLOBE NEWSWIRE) — via InvestorWire – Grapefruit USA, Inc. (OTCQB: GPFT) (“Grapefruit” or the “Company”), a premiere, fully licensed California-based cannabis company, is further updating its recent announcement that it has been approached by a Canadian cannabis company to enter into discussions concerning a potential acquisition transaction. The discussions have evolved to include development of a Memorandum of Understanding (“MOU”) setting forth terms under which the parties could enter into a Joint Venture to jointly manufacture, distribute and market Grapefruit’s products, including, but not limited to, Grapefruit’s patented disruptive Hourglass™ THC/Cannabinoid time-release delivery cream throughout Canada.
In February, the Company signed a Memorandum of Understanding (the “MOU”) with a Canadian partner which sets forth the general terms of their agreement to form a new joint venture corporation to manufacture and distribute Grapefruit’s patented, disruptive Hourglass THC/ cannabinoid products, throughout the Commonwealth of Canada including on Canadian First Nation Lands.
Under the terms of the MOU, products to be sold in Canada shall be manufactured in Canada in licensed facilities, and in some cases under appropriate framework on Canadian First Nations Land under license from Grapefruit by the Joint Venture, with the provision of technical know-how, lab staff and the patented Z-Pod by Grapefruit and provision of compliant Canadian-made THC/CBD distillates and terpenes by the Canadian Partner. Subject to certain, yet to be negotiated issues the Joint Venture shall be managed jointly by Grapefruit and the Canadian Partner and Joint Venture profits will generally be split 50%/50%, subject to certain exceptions.
The Canadian Partner shall have exclusive rights with respect to sales of Hourglass products in Health Canada Permitted retail locations, and in First Nation’s Lands, from the formation of the Joint Venture with exclusive rights with respect to sales of Hourglass products throughout Canada for 180 days while the parties negotiate in good faith to establish ‘unit sales’ minimums to support exclusivity.
Bradley J. Yourist, Grapefruit CEO, commented, “As we have stated before, a joint venture may precede without precluding an acquisition. Development of the Hourglass’ MOU to both manufacture and distribute Hourglass into Canada has moved the entire process forward as we now more clearly understand each other’s overall goals and priorities as well as the capital requirements and legal, regulatory and logistical challenges of finalizing a Joint Venture and/or an Acquisition. We expect to bring the process forward to the point of making a decision in the next 60-90 days. Once again, that being said, we wish to emphasize that the discussions reported here, although largely positive remain preliminary in nature and may be terminated at any time. Grapefruit will update the public as necessary on any material Joint Venture or acquisition developments as events proceed.”
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Grapefruit’s corporate headquarters is in Westwood, Los Angeles, California. Grapefruit holds California permits and licenses to both manufacture and distribute cannabis products in the Golden State. Grapefruit’s extraction laboratory and manufacturing and distribution facilities are located in the industry-recognized Coachillin’ Industrial Cultivation and Ancillary Canna-Business Park in Desert Hot Springs, located on the extension of North Canyon Road, approximately 14 miles north of downtown Palm Springs. To obtain further information on Grapefruit and its operations, please visit the Company’s website at https://grapefruitblvd.com/.
Safe Harbor Statement
Grapefruit cautions that any statement included in this press release that is not a description of historical facts is a forward-looking statement. Many of these forward-looking statements contain the words “anticipate,” “believe,” “estimate,” “may” “intend,” “expect” and similar expressions. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained herein. These forward-looking statements are based largely on the expectations of the Company and are subject to a number of risks and uncertainties inherent in Grapefruit’s business, including, without limitation: the Company may not ever obtain additional funds necessary to support its business development and growth plans; and the Company may not ever achieve the market success to reach or sustain a profitable business. In addition, there are risks and uncertainties related to economic recession or terrorist actions, competition from much larger cannabis companies, unexpected costs and delays, potential product liability claims, and many other factors. More detailed information about Grapefruit and the risk factors that may affect the realization of forward-looking statements is set forth in the Company’s filings with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K, its Quarterly Report on Form 10-Q for the period ended Sept. 30, 2020, and its Registration Statement on Form S-1/A. Such documents may be read free of charge on the SEC’s website at www.sec.gov. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement, and Grapefruit undertakes no obligation to revise or update this press release to reflect events or circumstances after the date hereof. This caution is made under the safe harbor provisions of Section 21E of the Private Securities Litigation Reform Act of 1995.
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