Akanda Corp. Announces Closing of the Sale of RPK

Rhea-AI Summary

Akanda Corp. (NASDAQ: AKAN) strengthens its financial position by selling its Portuguese subsidiary RPK to SOMAÍ Pharmaceuticals for $2 million in cash. The buyer also assumes approximately 4 million Euros of debt, enhancing Akanda's financial stability. Akanda continues to expand its presence in the global cannabis market through its UK subsidiary, Canmart, focusing on importing and distributing Cannabis-Based Products for Medicinal use (CBPMs) and developing the Gabriola Green Project in Canada for THC and CBD products production.

Financial Analyst

The completion of the transaction between Akanda Corp. and SOMA Pharmaceuticals Ltd. for the sale of Akanda's Portuguese subsidiary represents a strategic financial maneuver for Akanda. The infusion of USD $2,000,000 in cash, in addition to the assumption of liabilities and debt by SOMA, significantly improves Akanda's balance sheet. This reduction in debt and increase in cash reserves can potentially enhance Akanda's creditworthiness and investment appeal in the eyes of current and prospective shareholders.

The transaction appears to be a deliberate move to consolidate operations and focus on key markets, such as the UK and Canada. Akanda's emphasis on its UK subsidiary, Canmart and the development of the Gabriola Green Project in Canada, indicates a strategic pivot towards these regions which could see a higher growth potential in the medical cannabis industry. This could lead to increased market share and revenue growth in the long term, provided that regulatory hurdles are effectively managed and consumer demand continues to rise.

Market Research Analyst

From a market perspective, Akanda's sale of its Portuguese subsidiary and the subsequent focus on its operations in the UK and Canada suggest a repositioning within the global cannabis market. The UK's market for Cannabis-Based Products for Medicinal use (CBPMs) is growing and Akanda's role as an importer and distributor places it in a pivotal position to capitalize on this trend. The company's ability to provide third-party products and its collaboration with clinical cannabis operations could drive differentiation and competitive advantage.

Furthermore, the development of the Gabriola Green Project is indicative of Akanda's long-term strategy to diversify its product offerings with both THC and CBD products. This could enable the company to tap into different segments of the market, catering to a broader range of medicinal and potentially recreational users, subject to regulatory approval. The anticipation of regulatory framework advancement for CBD cultivation, with a forward-looking approach to THC, suggests an adaptive and proactive business model that could yield positive outcomes in the evolving regulatory landscape of the cannabis industry.

Legal Expert

The legal implications of Akanda's recent transaction and its ongoing projects are multifaceted. The sale of the Portuguese subsidiary and the transfer of liabilities to SOMA Pharmaceuticals likely involved complex legal negotiations, particularly in the context of international business and the highly regulated nature of the cannabis industry. The assumption of debt by SOMA will have required detailed due diligence to ensure compliance with both Portuguese and international financial regulations.

Moreover, Akanda's operations in the UK and Canada involve navigating the legal frameworks of CBPMs and controlled substances respectively. In the UK, the import and distribution of CBPMs are governed by strict regulations and Akanda's compliance with these rules will be critical to its operational success. In Canada, the regulatory framework for THC and CBD products is also complex and the company's ability to initiate CBD cultivation and potentially expand to THC products will depend on its adherence to Health Canada's guidelines.

The company's statement in the press release regarding the non-constitutive nature of an offer to sell securities emphasizes the importance of complying with the Securities Act of 1933 and related state securities laws. This highlights Akanda's awareness of the legal intricacies of public company operations and securities offerings.

London, United Kingdom--(Newsfile Corp. - April 11, 2024) - On April 1, 2024, Akanda Corp. (NASDAQ: AKAN) ("Akanda" or the "Company"), an international medical cannabis company, completed the transaction with SOMAÍ Pharmaceuticals Ltd. (the "Buyer") for the sale of RPK, its indirect wholly-owned Portuguese subsidiary.

Pursuant to the provisions set forth in the definitive share purchase agreement, the cash purchase price is Two Million United States Dollars (USD $2,000,000). In addition SOMAÍ is assuming up to One Millions Euros of current liabilities and RPK's debt with the senior secured lender Bank, Caixa Agricola. In total the Buyer is assuming approximately 4,000,000 Euros of debt. In accordance with the terms of the proposed transaction, a deposit amounting to Five Hundred Thousand United States Dollars (USD $500,000) was released from a joint escrow account and the remainder of the purchase price was paid directly to the Company.

Akanda Corp. is now in a stronger financial position and will continue to strengthen its presence in the global cannabis market through its wholly-owned United Kingdom (UK) subsidiary, Canmart. Canmart is a licensed importer and distributor of Cannabis-Based Products for Medicinal use (CBPMs) in the UK. and provides third party and specialist import and distribution services for Schedule 2 products including CBPM's. Canmart continues to work further with premium product suppliers to bring safe, effective and required products to market that patients demand, and working with existing and new clinical cannabis operations in the UK to provide third party products. Beyond its operations in the UK, Akanda is also developing the Gabriola Green Project in British Columbia, Canada. This farming property is set to host facilities for the production of tetrahydrocannabinol (THC) and cannabinoid (CBD) products, reflecting the Company's commitment to expanding its footprint and advancing its projects across both Europe and North America. The Company has initiated the regulatory framework to begin CBD cultivation with a future outlook towards THC.

Interim CEO and Executive Director, Katie Field commented, "Akanda is in a strong position to execute a new sustainable strategic direction. The company is in a better cash position and has eliminated most of its debt. We are looking forward to the Company's anticipated growth."

This press release does not constitute an offer to sell or the solicitation of an offer to buy the Company's securities, nor shall there be any sale of such securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction. Any offers, solicitations or offers to buy, or any sales of securities will be made in accordance with the registration requirements of the Securities Act of 1933, as amended.

About Akanda Corp.

Akanda is an international medical cannabis and wellness platform company seeking to help people lead better lives through improved access to high quality and affordable products. Akanda's portfolio includes CanMart, a UK-based fully licensed pharmaceutical importer and distributor which supplies pharmacies and clinics within the UK. The Company's seed-to-patient supply chain also includes partnerships Cellen Life Sciences' Leva Clinic, one of the first fully digital pain clinics in the UK. Akanda also acquired the right to develop a Canadian farming property in British Columbia, including farming land and related operations and licenses. The Company plans to develop tetrahydrocannabinol (THC) and cannabinoid (CBD) facilities at this site.

Connect with Akanda: Email | Website | LinkedIn | Twitter | Instagram

Investor Contact

ir@akandacorp.com

About SOMAÍ

SOMAÍ Pharmaceuticals is a leading EU-GMP European pharmaceutical and biotech company with a global footprint of distribution for the largest and most advanced EU GMP-certified cannabinoid-containing pharmaceuticals portfolio.

At SOMAÍ, we are building a leading global brand with the most robust pipeline of innovative cannabis-based therapeutics. We envision a world where people live a healthy lifestyle empowered by natural cannabis medicine.

SOMAÍ owns a state-of-art manufacturing facility and indoor cultivation in Lisbon Portugal, and has global sales teams in the largest medical cannabis markets. We are continuing to make acquisitions and global brand partnerships that make us one of the few vertically integrated companies in the EU, able to cater to the diverse needs of fast-growing European cannabis markets. For more information, please visit SOMAÍ's website.

Contact Information:

SOMAÍ Pharmaceuticals
Media Contact: hello@somaipharma.eu
Website: somaipharma.eu

Cautionary Note Regarding Forward-Looking Information and Statements

This press release contains certain "forward-looking information" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only Akanda's beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of Akanda's control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or may contain statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "will continue", "will occur" or "will be achieved" and similar expressions and include statements regarding the timing and completion of the proposed offering. Forward-looking information may relate to anticipated events or results including, but not limited to business strategy, product development and sales and growth plans. The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and Akanda does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws.

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To view the source version of this press release, please visit https://www.newsfilecorp.com/release/205004

FAQ

What was the purchase price for Akanda Corp.'s Portuguese subsidiary RPK sold to SOMAÍ Pharmaceuticals ?

The cash purchase price was Two Million United States Dollars (USD $2,000,000).

What debt is SOMAÍ Pharmaceuticals assuming as part of the transaction with Akanda Corp.?

SOMAÍ is assuming up to One Million Euros of current liabilities and RPK's debt with the senior secured lender Bank, Caixa Agricola, totaling approximately 4,000,000 Euros.

What is Akanda Corp.'s UK subsidiary, Canmart, licensed for?

Canmart is a licensed importer and distributor of Cannabis-Based Products for Medicinal use (CBPMs) in the UK, providing import and distribution services for Schedule 2 products including CBPM's.

Where is Akanda Corp. developing the Gabriola Green Project?

Akanda is developing the Gabriola Green Project in British Columbia, Canada, for the production of tetrahydrocannabinol (THC) and cannabinoid (CBD) products.

Who is the Interim CEO and Executive Director of Akanda Corp.?

Katie Field is the Interim CEO and Executive Director of Akanda Corp.

What is Akanda Corp.'s future outlook towards CBD cultivation?

The Company has initiated the regulatory framework to begin CBD cultivation with a future outlook towards THC production.

What is Akanda Corp.'s strategic direction according to Interim CEO Katie Field?

Akanda is in a strong position to execute a new sustainable strategic direction, with improved cash position and reduced debt, anticipating future growth.