MPX International Provides Year-End Investor Update
TORONTO, ONTARIO, December 9, 2020 – MPX International Corporation (“MPX International”, “MPXI” or the “Corporation”) (CSE:MPXI; OTCQX:MPXOF), a multinational diversified cannabis company, is please to provide the below update to investors.
“Calendar 2020 has been an exciting year for MPXI, noted Scott Boyes, Chairman, CEO and President of MPX International. “We started the year with multiple projects under development in Canada, Switzerland, Malta, South Africa and Australia. A company that was pre-revenue on most of its initiatives faced the potential of stagnation by the emergence of the COVID-19 pandemic and various and multiple lock-downs, staffing issues and interruptions in the capital markets that went along with it, yet MPXI has managed to move forward on all fronts and is poised for dramatic and profitable revenue growth in 2021 and beyond.”
Most importantly, the finalization of long-standing efforts with Canadian regulators on multiple projects, has permitted Canadian operations to advance significantly over the past five months with the pace of progress accelerating during calendar Q4. The highlights of that progress are described below:
- Canveda Inc. (“Canveda”), a wholly owned subsidiary of MPXI and licence holder under the Cannabis Act (Canada), received a license amendment from Health Canada authorizing Canveda to produce, sell, and export all categories of permitted Canadian cannabis products, including topicals, extracts and edibles. This amendment allows Canveda to immediately expand into the production and sale of Cannabis 2.0 products, including extracts, vapes, tablets and topical creams. These products will be offered under both the “Salus BioPharma” medical brand and the popular recreational “Strain Rec™” brand.
- Canveda introduced its recreational cannabis brand “Strain Rec™” in the Province of Saskatchewan. The “Strain Rec™” brand is present in nearly half of Saskatchewan’s existing retail stores and expect our brand presence to increase in the New Year as Saskatchewan is projecting to double the number of retail stores in early 2021. New “Strain Rec™” products are slated to be introduced in early 2021 to include Cannabis 2.0 products.
- The “Strain Rec™” brand was also introduced into the Province of Alberta through a recreational wholesale supply contract with Alberta Gaming, Liquor & Cannabis (“AGLC”), the sole purchaser of recreational cannabis products in Alberta. Initially, Canveda’s supply agreement was for dried flower. Canveda will seek to amend the supply agreement to include Cannabis 2.0 products in early 2021.
- MPXI Alberta Corporation, a wholly-owned subsidiary of MPXI, acquired all of the assets of Blaze 420 Today Inc. (“Blaze 420”), including the leasehold interests to three (3) locations across Alberta which each have received development permits to operate as retail cannabis stores (the “Assets”) in Alberta. The Assets enable MPXI to establish a cannabis retail platform in Alberta and open up to three (3) retail cannabis stores in the Edmonton, Alberta area, subject to the final approval from AGLC, upon meeting all licensing requirements. The stores will operate under the “Strain Rec™” brand and will purchase its inventory from the AGLC, including “Strain Rec™” branded products. The first of these retail stores is scheduled to open in early 2021.
- Canveda entered into an agreement with Panaxia Pharmaceutical Industries Israel Ltd. (“Panaxia”), the largest manufacturer and distributor of medical cannabis products in Israel, for the packaging and distribution of cannabis which will be marketed and sold in Israel under Canveda’s medical brand “Salus BioPharma”. The first shipment of 100 kg arrived in Israel in late November 2020 and is being prepared at Panaxia’s state-of-the-art facilities for sale into the Israeli market. Undertakings have commenced for a second Israeli import permit.
- Due to anticipated sales for cannabis exceeding Canveda’s production capabilities, Canveda entered into a supply agreement for medical and recreational cannabis (the “Zenabis Supply Agreement”) with the Canadian licence holder, Zenabis Ltd. (“Zenabis”), a large scale Canadian producer with an estimated 96,400 kg of licensed cannabis cultivation space. The Corporation felt it was necessary to secure a stable supply of high quality, high-THC cannabis to supplement its increasing demand. The agreement secures a supply of an additional 1,200 – 4,000 kg of cannabis flower over 12 months.
- Spartan Wellness Corporation (“Spartan Wellness”), a wholly-owned subsidiary of MPXI, entered into a services agreement with Medical Cannabis by Shoppers Drug Mart Inc. (“Medical Cannabis by SDM”), a subsidiary of Shoppers Drug Mart. Spartan Wellness is utilizing its network of volunteers and professionals to provide clinical services for patients of Shopper Drug Mart including prescribing cannabinoid combination and strength, advising on delivery methods and providing general education about cannabis use as well monitoring efficacy and patient well-being, by conducting follow-up medical appointments with patients. Shopper’s Drug Mart is Canada’s largest chain of pharmacies and through its subsidiary, Medical Cannabis by SDM, is licenced to sell medical cannabis.
- MCLN Inc. (formerly 2702148 Ontario Inc.) (“MCLN”), a wholly-owned subsidiary of MPXI and a leading Canadian private web-based cannabis portal, has developed, in conjunction with Miramedia Retail Inc. (“Miramedia”), a new MCLN branded web-based portal, “MiraCBD” https://miracbd.ca (the “MiraCBD Portal”). Miramedia is utilizing its network of retailers, natural health practitioners and consumers to connect their customers to the MiraCBD Portal. The MiraCBD Portal provides retailers, natural health practitioners and consumers with access to the Medical Cannabis Learning Network platform which operates as a: (a) private network educational platform, providing information about the use of medical cannabis; (b) telemedicine medium providing patient access to medical practitioners for advice and cannabis prescriptions from MCLN’s affiliate, Spartan Wellness; and (c) sales platform for Canadian cannabis licence holders. MCLN earns educational and consultation fees from federal licence holders subscribing to its services. MCLN also entered into a client referral agreement with Mother’s Mary Social Enterprise Ltd., a company that focuses on educating and promoting mothers on the benefits of medical cannabis and currently has 5,500 members. MCLN will provide a Mother’s Mary branded MCLN channel in order to help this group further educate its members and use the virtual medical services offered by Spartan Wellness along with access to the marketplace.
- Canveda personnel completed a tissue culture research project with the virtual aide of MPXI’s Australian horticultural team. Plants have been successfully rooted for tissue culture, all standard operating procedures have been developed and this technology is ready to be scaled on a commercial level in 2021.
“It’s been a rapid-paced year for our Canadian operations”, notes Michael Arnkvarn, MPXI’s Canadian COO. “We have commenced shipments into two provinces with other Canadian jurisdictions on the near-term horizon. We have also completed our first international transaction into Israel and are in multiple discussions with distributors in several European countries. 2021 looks equally exciting”.
Despite the global COVID-19 pandemic, Holyworld SA (“Holyworld”), a wholly owned subsidiary of MPXI, has experienced a strong year in 2020. The team has overcome the many challenges presented by COVID-19 to foster growth and progress. Additionally, the Holyworld management team has undergone a transformation bringing on board sales and management executives from prominent European cannabis companies and, as with the rest of the MPXI corporate group has undergone significant cost reductions to bring spending in line with the Swiss business plan.
Despite ongoing COVID-19 related lab equipment delivery delays that have only allowed part of our Swiss lab to become operational, Holyworld is now capable of producing approximately 30 kg of high-quality distillate per month operating a single shift. Adding an additional shift would bolster capacity to approximately 60 kg per month.
To date, Holyworld has produced approximately 80 kg of crude with less than 1% THC, 20 kg of THC-free crude and 20 kg of high-quality distillate (85% - 89% CBD).
The production from the Holyworld lab will be sold into the wholesale market and will also be used in “Holyweed” branded products sold through the Holyweed retail store in Geneva and www.cbdetc.com, a new multi-brand European marketplace for CBD products including the following:
- Loose-Leaf Pouches: Pouches containing 10 g of High-CBD, organic and proprietary blend of flower and trim with an RRSP of CHF10 (US$11.25/C$14.40) per pouch.
- Hemp Cigarettes: Packages with 10 sticks containing High-CBD, organic and proprietary blend of flower rolled 100% hemp paper and filters with an RRSP of CHF10 (US$11.25/C$14.40) per package.
- Golden Oil: A new range of oils fitting in to each Holyweed product family (Party Time, Wellness, Sleep Tight and Sexy Time).
With the success of the Geneva flagship “Holyweed” branded retail store, Holyworld is looking to expand to other retail locations in and around Switzerland in 2021.
Holyworld has also launched a new corporate website www.holyworld.ch to increase outreach, online presence and B2B sales.
Following on the growth and developments in the Swiss marketplace, 2021 is shaping up to be a transformative year for Holyworld. In addition to the above initiatives, the Swiss team is in discussions to supply large Swiss retail supermarkets and mid-range corner shop chains with its smokable products in calendar Q3 2021.
The Court of Justice of the European Union has recently ruled that member states must not prohibit the marketing of lawfully produced cannabidiol, a decision that adds recognition for CBD’s health and wellness benefits and opens up the entire multi-billion-dollar EU market to companies like Holyworld. We believe that Holyworld is well-positioned to ride this wave of relaxed restrictions in Europe.
MPXI Malta Developments
MPXI’s Maltese operations have advanced significantly over the past five months substantially completing the buildout of its “GMP-ready” facility located in Mehriel, just outside of Valletta, the capital city of Malta, including all site infrastructure required to support the attainment of an EU-GMP certification for flower packaging. The buildout entailed numerous structural alterations and reinforcements required to achieve the desired site security, EU-GMP compliant layout and load-bearing capabilities. MPXI’s Maltese team, led by Karl Bartolo, used their long-standing experience in the highly competitive generic pharmaceutical manufacturing sector to design a facility that would meet the highest standards of EU-GMP whilst maintaining a cost-effective capital expenditure and operational cost.
Following the completion of the facility, MPXI’s Maltese operation has now submitted its application for an EU-GMP certification with the Maltase Medicines Authority triggering a preliminary inspection subsequent to which the process of importing biomass material required for validation batches may be initiated. It is anticipated that EU-GMP certification will occur during calendar Q2 2021 followed by certification for the packaging of medical cannabis oils in calendar Q4 2021.
MPXI’s Maltese operations will leverage the Zenabis Supply Agreement securing a stable supply of high quality, high-THC medical cannabis to meet initial demand prior to the commencement of MPXI’s operations in South Africa.
In anticipation of the receipt of EU-GMP certification, MPXI has engaged with several European groups for the supply of EU-GMP certified medical cannabis and expects to solidify arrangements in the first half of calendar 2021.
On December 2, 2020, the United Nation’s Commission on Narcotic Drugs voted, on recommendation of the World Health Organization, to remove cannabis and cannabis resin from the category of drugs which included highly addictive and dangerous opioids such as heroin. This rescheduling will allow for more research on cannabis for medical use as well as create new opportunities globally for the Corporation and, in particular, MPXI’s Maltese operations which will benefit from these developments.
South African Developments
First Growth Holdings (PTY) Ltd. (“First Growth”), an indirect subsidiary of MPXI, together with a prominent group of South African agriculturalists and investors, has made significant progress towards the construction of a half-hectare (53,000 sq. ft.) high-tech greenhouse in the wine producing Stellenbosch region of the Western Cape. Whilst the project has been delayed by COVID-19, the First Growth team recently completed the second inspection by South African Health Products Regulatory Authority (“SAHPRA”), the South African cannabis regulatory body, and is currently awaiting results. Actual cultivation of cannabis, with subsequent export intended for the Corporation’s Maltese facility, could commence as early as calendar Q3 2021.
MPX Australia Pty Ltd. (“MPXI Australia”), a wholly-owned subsidiary of MPXI, has been awarded licenses to cultivate, manufacture, import and export cannabinoid-based medicines to/from Australia, from the Australian ODC, the Australian cannabis regulatory body. However, the opportunity to import products into Australia from Malta, Canada and South Africa has prompted the Corporation to pivot from domestic production in Australia to developing an import and distribution capability based in Sydney and now plans to import and introduce the “Salus BioPharma” branded products to the Australian market.
Despite the COVID-19 pandemic the Corporation’s momentum has not changed. MPXI has successfully managed to move forward and management is anticipating significant growth in revenues and earnings in 2021. In addition, there are potential new opportunities in the offing that could be transformative to MPXI’s global expansion. We will inform the market, if and when these new ventures move forward.
About MPX International Corporation
MPX International Corporation is a multinational diversified cannabis company focused on developing and operating assets across the international cannabis industry with an emphasis on cultivating, manufacturing and marketing products which include cannabinoids as their primary active ingredient. With current operations spanning four continents in Canada, Switzerland, South Africa, Malta and Australia as well as evolving partnership and distribution opportunities in other jurisdictions, MPXI continues to position itself as an emergent global participant in the cannabis industry.
Cautionary Statement Regarding Forward-Looking Information
This news release includes certain “forward-looking statements” under applicable Canadian securities legislation that are not historical facts. Forward-looking statements involve risks, uncertainties, and other factors that could cause actual results, performance, prospects, and opportunities to differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements in this news release include, but are not limited to, MPX International’s objectives and intentions. Forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties and other factors which may cause actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic and social uncertainties; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; delay or failure to receive board, shareholder or regulatory approvals; the Corporation’s ability to effectively deal with the restrictions, limitations and health issues presented by the COVID-19 pandemic; future cannabis pricing; cannabis cultivation yields; costs of inputs; its ability to market products successfully to its anticipated clients; reliance on key personnel and contracted relationships with third parties; the regulatory environment in Australia, Canada, Malta, South Africa, Switzerland and other international jurisdictions; the application of federal, state, provincial, county and municipal laws; and the impact of increasing competition; those additional risks set out in MPX International’s public documents filed on SEDAR at www.sedar.com, including its audited annual consolidated financial statements for the financial years ended September 30, 2019 and 2018, its unaudited interim condensed consolidated financial statements for the three and six months ended March 31, 2020 and for the three and nine months ended June 30, 2020 and the corresponding management’s discussion and analysis; and other matters discussed in this news release. Although MPX International believes that the assumptions and factors used in preparing the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. Except where required by law, MPX International disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.
For further information, please contact:
MPX International Corporation
Scott Boyes, Chairman, President and CEO\
Released December 9, 2020