A joint venture of CannAmerica Brands Corp., Invictus MD Strategies Corp. and CBDistribution Co. Ltd. plans to acquire 80% of Z3 Sciences LLC for $42.3 million.
Z3 Sciences extracts hemp biomass into cannabidiol isolate, a nonpsychoactive cannabinoid found in marijuana which is being researched for therapeutic purposes. The joint venture's acquisition arrives at the heels of U.S. President Donald Trump's $867 billion farm bill, which legalized mass hemp production and distribution in the country.
The buyers have entered a preliminary agreement that would see CannAmerica and Invictus issue about $3.8 million of their common shares, individually, along with $5 million in cash payable over a period of 240 days from the closing date of the agreement, expected by March 17.
Z3 will also be offered $1.5 million in cash to buy equipment and for working capital purposes, and will receive further payments if it meets certain revenue targets throughout 2020.
Z3's existing management team are expected to continue, including Jacob Tupper, the company's co-founder and chairman, Ben Metzker, the company's co-founder, and Winston Cook, the company's CEO.