Zenabis Signs Agreement for Entrance into Cannabis-Infused Beverage Market

VANCOUVER, Aug. 26, 2019 /CNW/ -Zenabis Global Inc. (TSX:ZENA(“Zenabis” or the “Company“) today announced that it has entered into a definitive agreement (the “Agreement“) with a Canadian beverage technology company (the “Beverage Partner“) that will supply Zenabis with water soluble, odourless, flavourless and colourless cannabis-infused inputs (the “Beverage Inputs“). The Company plans to utilize the technology in the production of cannabis-infused beverages and other cannabis-infused products. With the Beverage Inputs, Zenabis expects to produce cannabis-infused beverages that have onset times less than five minutes.

Under the terms of the Agreement, Zenabis will have access to the Beverage Inputs to produce a wide range of THC and CBD-infused beverages, as permitted by applicable laws and regulations. The Beverage Partner will produce the Beverage Inputs using cannabis supplied by Zenabis. At Zenabis’ option, the Beverage Partner may also produce finished cannabis-infused beverages for Zenabis by installing a production line for both Beverage Inputs and finished cannabis-infused beverages, at its own cost, at Zenabis Stellarton. As one of many potential uses for the Beverage Inputs, Zenabis intends to produce a line of CBD-infused kombucha products together with Hillsboro Corp Inc. (“True Büch,” the cultured tea beverage-maker in which Zenabis acquired a 51% in January 2019).

“This Agreement puts Zenabis in a strong position to compete in the cannabis-infused beverage market once these products are legalized in Canada later this year,” said Andrew Grieve, Chief Executive Officer of Zenabis. “The Canadian market for these beverages is estimated to be worth $529 million1, so the ability to infuse cannabis in beverages; without affecting their taste, smell or appearance; strengthens Zenabis’ position relative to the many other companies planning to commercialize similar products.”

About Zenabis

Zenabis is a significant Canadian licensed cannabis cultivator of medical and recreational cannabis, and a propagator and cultivator of floral and vegetable products. Zenabis employs staff coast-to-coast, across facilities in Atholville, New Brunswick; Delta, Aldergrove, Pitt Meadows and Langley, British Columbia; and Stellarton, Nova Scotia. In addition to gaining technologically advanced knowledge of plant propagation, the recent addition of state-of-the-art greenhouses in Langley, Pitt Meadows and Aldergrove provides Zenabis with 3.5 million square feet of facility space that can, if fully converted, be dedicated to cannabis production.

If all facility space at Zenabis Atholville, Zenabis Stellarton and Zenabis Langley is fully converted and dedicated to production, Zenabis will own, and have access to 635,000 square feet of high quality indoor cannabis production space, as well as 2.1 million square feet of greenhouse cannabis production space at its Langley facility, with this production strategically positioned on Canada’s coasts. Zenabis expects these facilities to have an annual design capacity of 143,200 kg of dried cannabis under its existing capital plan. These facilities, if fully built out and converted for cannabis production, would have an annual design capacity to yield approximately 490,800 kg of dried cannabis annually, for both national and international market distribution. An additional 700,000 square feet of greenhouse space will be used to continue the existing propagation business and produce industrial hemp, and can be converted to cannabis production at such a time that is beneficial to the strategic position of the Company. The Zenabis brand name is used in the cannabis medical market, while the Namaste and Blazery brand names are used in the cannabis adult-use recreational market, and the True Büch brand name is used for Zenabis’ kombucha products.

Forward Looking Information 

This news release contains statements that may constitute “forward-looking information” within the meaning of applicable Canadian securities legislation. Forward-looking information may include, among others, statements regarding the future plans, costs, objectives or performance of Zenabis, or the assumptions underlying any of the foregoing. In this news release, words such as “may”, “would”, “could”, “will”, “likely”, “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate” and similar words and the negative form thereof are used to identify forward-looking statements. In this news release, forward-looking statements relate, among other things, to: our commercial partnership with the Beverage Partner and the expected benefits resulting therefrom; plans to utilize the technology in the production of cannabis-infused beverages and other products; the expectation of producing cannabis-infused beverages that will have onset times of less than five minutes; and projected kilogram yield of licensed facility space and facility space in the process of, or scheduled for, construction and/or licensing. Forward-looking statements should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether, or the times at or by which, such future performance will be achieved. No assurance can be given that any events anticipated by the forward-looking information will transpire or occur. Forward-looking information is based on information available at the time and/or management’s good-faith belief with respect to future events and are subject to known or unknown risks, uncertainties, assumptions and other unpredictable factors, many of which are beyond Zenabis’ control. These risks, uncertainties and assumptions include, but are not limited to, those described in the shelf prospectus dated April 9, 2019, a copy of which is available on SEDAR at www.sedar.com and could cause actual events or results to differ materially from those projected in any forward-looking statements. Furthermore, any forward-looking information with respect to available space for cannabis production is subject to the qualification that management of Zenabis may decide not to use all available space for cannabis production, and the assumptions that any construction or conversion would not be cost prohibitive, required permits will be obtained and the labour, materials and equipment necessary to complete such construction or conversion will be available. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Zenabis does not intend, nor undertake any obligation, to update or revise any forward-looking information contained in this news release to reflect subsequent information, events or circumstances or otherwise, except if required by applicable laws.

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