LOS ANGELES, May 28, 2020 /PRNewswire/ -- International Cannabrands Inc. dba Radiko Holdings (CSE: RDKO) (the "Company") CEO Steve Gormley publishes an open status letter to Shareholders.
To Our Valued Shareholders,
Greetings from my home office in Redding, Connecticut. Today, May 27th 2020, was a fantastic day for Radiko – our share price closed at 4 cents, the highest it's reached since August 2019. The Radiko team and I have been busy, and this increase has largely been driven by the events that have occurred since my last update letter. For that reason, I wanted to reach out directly and provide you with a recap of what we've achieved.
It goes without saying that these are extraordinary times, and our hearts go out to everyone affected by COVID-19. We are especially grateful to our first responders and medical professionals who risk their lives each day to keep us safe, and to the essential workers keeping us all afloat. As the pandemic brought so many U.S. businesses to a near halt in March, cannabis dispensaries were designated as essential in 8 of the 11 states where adult-use is legal. This naturally begs the question; why is cannabis still federally illegal in the United States?
In my January letter, I spoke about the 2020 election cycle and the important conversations on cannabis policy that were brought about as a result of the Democratic debates. Cannabis had surfaced as a major platform issue, with strong support for full federal legalization and expungement of past cannabis-related criminal convictions. It remains true that this political shift, coupled with an industry consolidation after a tumultuous 2019, has led us into a defining era for the sector and for our organization.
As we inch closer to federal acceptance in the U.S., Radiko's 2020 objectives remain unchanged; demonstrate strategic advantages including a strong balance sheet; a diverse portfolio of IP, manufacturing, and distribution; and a clear path to profitability in order to be well positioned for exponential growth.
To that end, below are some important recent updates:
Last month we unveiled a new name, new logo, and new ticker symbol as we announced that International Cannabrands would become Radiko Holdings. The initiative represents a final step in our evolution away from a legacy corporate identity and reflects the renewal of our corporate vision. The modernized look and evolving positioning perfectly illustrate our growing ambition in the market.
Board Appointments and Private Placements
We're proud to report that despite the challenging landscape, Radiko has raised approximately $1.3 million (CDN) through private placement since Sept 2019. All funds have come from strategic investors and at a premium to the stock price. Relative to the fundraising activity of other notable cannabis companies, this is unique and especially so when the sector is facing negative investor sentiment.
We were also tremendously pleased to announce the nominations of both Greg Ross and Renee Gagnon to our Board of Directors. Both Mr. Ross and Ms. Gagnon bring tremendous cannabis-related experience and resources to the company and will be a critical part of our growth as we execute against our mission.
We expect both nominees will be officially elected as Board members at the Company's upcoming AGM on June 29, 2020.
Our first in-house developed CBD brand, baseline, was featured in Newsweek just two months after launch. This is an important endorsement for a new brand inside of a crowded space, and the placement has already resulted in an uptick in online sales.
Additionally, baseline has launched a new (CBD-free) immunity product as an extension of its innovative supplement line to support customers wishing to find effective, plant-based solutions to growing health and wellness concerns. This product provides the brand the ability to market outside of the CBD audience and without the restrictions around marketing and selling CBD-based products, thereby significantly broadening its reach. Most notably, the product is now available on Amazon in the U.S..
La Vida Verde
After some months of dispute, we were able to reach a settlement with our 51% subsidiary La Vida Verde, Inc (LVV). Both parties are resolved to move forward with a renewed commitment to our partnership and to the success of both organizations.
In further strengthening this partnership, LVV has entered into an agreement with the Company's wholly owned subsidiary DB3 Management, LLC relating to the operation of our Carson City, Nevada cultivation effective May 19th and beginning with its first harvest. (See BioNeva below.)
Engaging LVV as a partner in our latest acquisition allows us to utilize the expertise across our assets and create an alignment of interests within our organization. The LVV team brings extensive experience in cannabis cultivation, extraction, retail, and product development, as well as vast experience in manufacturing, logistics, and distribution. We expect this collaboration will ultimately lead to additional opportunities to operate as partners on future acquisitions.
LVV comprises three well-established, California-based cannabis brands, each with powerful growth prospects which we expect will contribute significantly to the value of our THC portfolio.
Earlier this month, we closed on the transactions relating to BioNeva Innovations of Carson City, LLC, which comprises several value-added components including an 8,250 ft2 indoor cultivation center. We expect BioNeva to harvest an estimated 36-44 KG per month with cash flow beginning as early as June 2020.
The transaction also included the acquisition of additional related assets including underlying property and an existing agreement for the management of a second cultivation/production facility in Washoe County, Nevada. This facility is currently under construction but is expected to be operational in Q4 of 2020 and generating revenue by Q1 of 2021. The management fees are tied to the productivity of the facility.
This transaction adds significant enterprise value, and furthers our corporate development strategy of acquiring select, highly-profitable value chain investments to facilitate brand growth, enhance margins and bolster cash flow.
Normal Course Issuer Bid
This week, the Company announced its intention to commence a normal course issuer bid ("NCIB"), under which the Company may purchase up to 21,793,023 of the Company's common Shares, (representing approximately 5% of its issued and outstanding common shares) from surplus cash flow anticipated by BioNeva.
This announcement was important as I wish to quell any concerns that Radiko is contemplating a consolidation at this time. We are looking at raising capital through debt instruments and will not entertain a brokered round until the share price is consistent with the value of the Company.
My role as CEO is to maximize shareholder value, and I'm grateful that you're on this journey with us. My team and I look forward to bringing you more good news as we continue to strategically evaluate high-value assets, in particular those across the consumer brand space as well as retail prospects outside of California and Nevada, many of which may be acquired at a deep discount given the current landscape. Stay tuned.
NEITHER THE CANADIAN SECURITIES EXCHANGE NOR ITS REGULATION SERVICES PROVIDER HAS REVIEWED OR ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
Disclaimer concerning Forward-looking Statements
Certain statements included herein constitute "forward-looking statements" relating to the operations of the Company and its business prospects within the meaning of applicable securities laws. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management at this time, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Investors are cautioned not to put undue reliance on forward-looking statements. Additional risks and uncertainties regarding the Company are described in its publicly-available disclosure documents filed by the Company on SEDAR (www.sedar.com). The forward-looking statements contained in this news release represent the Company's expectations as of the date of this news release, or as of the date they are otherwise stated to be made, and subsequent events may cause these expectations to change. Except as required by law, the Company does not intend, and undertakes no obligation to update any forward-looking statements to reflect, in particular, new information or future events.
International Cannabrands Contact:
Chief Executive Officer
International Cannabrands, Ltd.
12655 W Jefferson Blvd
Los Angeles, CA, 90066
Ph: +1-(323)-828-4321 or
Investor Relations Contact:
The Howard Group
#350, 318 - 11 Avenue SE
Calgary, AB T2G 0Y2
Ph: +1-(403)-221-0915 or
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SOURCE Radiko Holdings