Next Green Wave Holdings Inc (CSE:NGW) (OTCQB:NXGWF) said Thursday that it has signed a definitive agreement for a strategic investment in Organic Medical Growth OMG3 INC, a Montreal company whose wholly-owned Colombian unit, Proymed SAS, produces non-psychoactive cannabidiol products.
If completed and approved by the Canadian Securities Exchange, the deal would give Next Green Wave access to the Colombian cannabis market, which has a potential six million people.
“To see how quickly Organic Medical Growth is growing their business opportunities in Colombia is exciting,” said Next Green Wave CEO Leigh Hughes. “As Organic Medical Growth grow their distribution channels, it opens up the platform for our brands outside of California and gives us scope to do more in a low-cost, high-margin environment in Colombia.”
Next Green Wave first signed a memorandum of understanding with Organic Medical Growth on February 14. Next Green Wave will now buy two million shares of Organic Medical Growth at C$0.25 per share for C$500,000 under a subscription agreement.
It will also receive an additional 4,300,600 shares representing 10% of Organic Medical Growth’s share capital in exchange for Next Green Wave’s commercial strategic support services. Furthermore, the company will have the option to buy 2,395,000 shares of Organic Medical Growth at C$0.50 per share, following its first round of financing.
The agreement is based on the expectation that Organic Medical Growth will complete its initial public offering in 2019.
Organic Medical Growth is working on launching nine cannabis-based topical products and the first two will be distributed in Colombia across the Ortix network of 7,300 stores within the next 60 days, said the company.
Operating in California, the world’s largest cannabis market, Vancouver-based Next Green Wave has an ace in its back pocket that many don’t – it is fully-licensed to conduct operations across the entire value chain: nursery, cultivation, extraction and distribution.
Next Green Wave’s 32,000 square feet indoor cannabis facility is in Coalinga, California, about halfway between LA and San Francisco.
Contact Uttara Choudhury at [email protected]