Emerging leader in infused cannabis beverages, BevCanna Enterprises Inc. (CSE:BEV, Q:BVNNF, FSE:7BC) (“BevCanna” or the “Company”), announced today that it has exercised its option to acquire the right, title and interest to DeeperGreen™, the proprietary water-soluble cannabinoid powder ingredient developed by partner Greener Frontiers.

“DeeperGreen technology expands BevCanna’s ability to produce a portfolio of cannabis infused beverage formats,” said Emma Andrews, Chief Commercialization Officer at BevCanna. “The addition of a water-soluble powder allows us to offer consumers more variety in methods of consumption, which can now pair with various consumption occasions. Powdered drink mixes complement our existing expertise in ready-to-drink products and allow us to expand the innovation pipeline for our house brands, and with white label partners through contract manufacturing.”

DeeperGreen converts extracted cannabis into a fast-acting, tasteless, odorless, water-soluble powdered ingredient, and has been proven to be a stable ingredient that when tested with cannabinoids, consistently delivers target concentrations within one batch and from batch-to-batch. Independent laboratory testing has also confirmed that DeeperGreen precisely infuses granular drink mixes and ready-to-drink water beverages.

Tests have confirmed that DeeperGreen, and products infused with DeeperGreen, meet the criteria to pass the current Cannabis Compliance Regulations set in California, and will allow for reliable water-soluble infusion manufacturing processes and dosing confidence for consumers.

On December 18th, 2019, the Company entered into an amendment agreement (the “Agreement”) to the Cannabis Beverage Joint Development Agreement (the “JD Agreement”) dated April 1, 2019 with Greener Frontiers Corporation (“Greener Frontiers”) and BevCanna US Operating Company Ltd. (“BevCanna US”), a wholly-owned subsidiary of the Company. Pursuant to the Agreement, the Company exercised its right under the JD Agreement to purchase all of the right, title, and interest in and to DeeperGreen and certain other intellectual property assets (the “Assets”) of Greener Frontiers (the “Acquisition”). In consideration for the Acquisition, BevCanna has agreed to issue common shares in the capital of BevCanna (each, a “Share”) to Greener Frontiers upon the achievement of certain performance milestones (each, a “Performance Milestone”) at a deemed price of US$0.38 (or C$0.50), subject to compliance with all applicable laws and stock exchange policies, as follows:

• 3,684,210 Shares within ten days of the date of achievement of sales of at least 10,000 single serve powder sachets at no less than $3.00 per unit under phase I of a pilot program (the “Pilot Program”) to be established pursuant to the Agreement;
  
  
• 3,684,210 Shares if (i) Greener Frontiers makes commercially reasonable efforts to allow and assist BevCanna to launch a line of infused drinks within nine months of the date of the Agreement, and otherwise performs its obligations under the Agreement and the JD Agreement; and (ii) BevCanna successfully commercializes and brings to market the line of infused drinks including achieving positive sales in California, excluding sales under the Pilot Program;
  
  
• 2,631,578 Shares on attainment of US$7.5 million revenues or US $3.6 million in EBITDA (Earnings before interest, tax, depreciation and amortization) by BevCanna no later than December 31, 2021 from sales in California of the line of the powder drinks developed in accordance with the Agreement; and
  
  
• 2,631,578 Shares on attainment of US$16.5 million in revenues, or US$9.9 million in EBITDA by BevCanna by December 31, 2022 from sales in California of the line of powder drink being developed in accordance with the Agreement.

For greater clarity, no Shares are issuable in connection with the Acquisition until the applicable Performance Milestone is achieved.

BevCanna also agreed to loan Greener Frontiers up to US$250,000 in connection with its stage 2 capital commitment in respect of a licensed manufacturing facility in Sacramento, California.

Under the Agreement, Greener Frontiers has agreed to continue to provide research and development, and commercialization services to BevCanna for their lines of powdered and drink-based products. Greener Frontiers also agreed to work with BevCanna to explore the application of DeeperGreen as a food ingredient, for future potential commercialization.

Closing of the Acquisition is expected to occur on or before December 21, 2019.

All securities issued pursuant to the terms of the Agreement will be subject to a statutory hold period expiring four months and one day following the date of issuance, and a voluntary pooling agreement. No finder’s fee will be paid in connection with the Acquisition.

The securities described herein have not been registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. Persons (as defined in Regulation S under the U.S. Securities Act) absent registration or an applicable exemption from the registration requirements. This news release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction where such offer, solicitation, or sale would be unlawful.

SOURCE BevCanna Enterprises Inc.