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WeedMD consolidates its operations with sale of Bowmanville operating assets

Published: 08:55 15 Jun 2021 EDT

WeedMD Inc -
WeedMD's operations are now fully centralized at its cultivation and production sites in the London-area in Ontario

WeedMD Inc (CVE:WMD) (OTCQX:WDDMF) (FRA:4WE) said it has closed a deal to sell all the shares of its subsidiary’s operating entity, Starseed Medicinal Inc, in a move that will help it streamline its operations and reduce debt.

The company, a federally licensed producer and distributor of medical-grade cannabis, is selling the shares to Final Bell Canada Inc for C$2.5 million in cash. Net proceeds of the sale will primarily be used to pay down debt.

The disposal follows the its recent proposed acquisition of CannTx Life Sciences Inc in return for WeedMD stock.

READ: WeedMD inks letter of intent to buy Canadian craft cultivator CannTx Life Sciences in an all-stock deal

Starseed is the licence holder for the Bowmanville production facility in Ontario, which is licensed by Health Canada for the cultivation, processing and sale of dried cannabis and cannabis extracts, and to conduct research. WeedMD will retain all aspects of its existing medical cannabis business, including its highly regarded Starseed Medicinal brand.

As a result of the facility optimization strategy initiated in early 2021 and the sale of its Bowmanville facility, WeedMD said it was realizing material operational efficiencies by streamlining and consolidating its cultivation operations at its Strathroy, Ontario facility and processing and production activities at its Aylmer, Ontario site.

“We continue to execute on our strategic plans to optimize and solidify the areas of our business that will drive increased revenue, improve our cash-flow, maximize our margins, pay down debt, and move us closer to profitability,” interim CEO and executive chair George Scorsis said in a statement.

“Starseed Medicinal has been an important accretive addition to our business and with our operations now fully centralized at our cultivation and production sites in the London-area, we are now fully ramped up in a more efficient manner. We are already seeing these optimization initiatives improving productivity and reducing our production costs, all for the long-term best interests of our patients, customers and shareholders.”

Contact the author: stephen.gunnion@proactiveinvestors.com

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