Portland, OR – July 20th, 2020 – Hemptown Organics Corp (“Hemptown” or the “Company”), is pleased to announce that it has entered into a letter of intent (“LOI”) with Hempacco Company Inc. (“Hempacco”) and Pacifica Premiums Inc. (“Pacifica Premiums”). The LOI contemplates that Hemptown will acquire all of the outstanding shares of both Hempacco and Pacifica Premiums, to further diversify the Company’s product offering and expand its distribution and sales channels. This acquisition aligns with Hemptown’s strategy of vertical integration, whereby Hemptown’s farming operations will supply 100% of the hemp required by Hempacco and Pacifica for their own brands and private label services, including Hemptown branded hemp smokables.
Hempacco is a Southern California based manufacturing company producing innovative, filtered hemp smokable products. Its products resemble a traditional cigarette but contain only industrial hemp, rich in CBD and CBG, and less than 0.3% THC. There is no nicotine or tobacco in Hempacco’s products. Hemp smokables are a rapidly growing segment of the cannabinoid consumer packaged goods market, positioned to capitalize on the established tobacco market, with a current addressable market of over $849 billion globally, and over $100 billion in the US alone. Hempacco owns The Real Stuff™ Hemp Cigarettes CBD/CBG Smokables, offers hemp smokables as a private label supplier, and owns its own CBD/CBG consumer packaged goods vending machines to distribute products across the USA. Hempacco was recently featured in a special on hemp in America premiering on Netflix later this year.
The LOI also contemplates Hemptown investing in Hempacco’s hemp smokable operations in Mexico (“UST Mexico”). With established operations, distribution and revenue in the tobacco industry in Mexico and internationally, UST Mexcio is strategically positioned to capitalize on impending legislation in Mexico legalizing industrial hemp and hemp smokable products. With over 125m people, Mexico is blue-sky opportunity for the sale of cannabinoid-based consumer packaged goods. Through its distribution partners, UST Mexico currently sells its products in over 10,000 locations throughout Mexico. Furthermore, the Mexican tobacco represents a total addressable market of over USD$4 billion, positioning Hemptown to capitalize on a large and growing market with hemp smokables.
Pacifica Premiums, who recently formed a partnership with Hempacco, is a lifestyle brand that is built upon a trendy coastal California beach vibe. The team behind Pacifica blends California recreational cannabis experience with consumer-packaged goods industry veterans. The team has had success in beverages, electronic cigarettes, cannabis, and hemp. They have long term relationships with Walmart, 7-Eleven, Circle K and Costco worldwide. Unlike most of the current hemp smokable products on the market, Pacifica Premiums will be offering only super high-quality hemp for a much more enjoyable experience. As the tagline states, “It’s Pacifica Time Somewhere”
“We are very excited for the opportunity to acquire this unique group of innovative companies representing a rapidly growing sector of the overall hemp and cannabinoid industry. Industrial hemp smokable products present as massive opportunity both as a smoking cessation product, and for recreational use. We believe that, with their established, revenue generating, operations in the US and Mexico, Hempacco can be accretive to Hemptown’s overall bottom line while presenting attractive blue-sky for growth. These acquisitions align with Hemptown’s overall M&A growth strategy to expand our brand portfolio, broaden our channel diversification while extending our geographic reach, and increasing our revenue across B2B and B2C segments” said Eric Gripentrog, Hemptown’s CEO.
“We are pleased to have the opportunity to join Hemptown, ensuring a steady and quality supply of raw hemp for our brands. Hemp smokables offer an alternative to tobacco, a market worth nearly $814 billion dollars annually. Together with Hemptown, we will continue to strive to be the premier manufacturer of hemp smokables in North America, and globally.” said Sandro Piancone, President of Hempacco.
Equity Private Placement Financing
The Company is also pleased to announce the non-brokered offering (the “Offering”) of units of the Company (the “Units”) at a price of USD$1.75 per Unit.
Each Unit will consist of one common share (a “Unit Share”) and one common share purchase warrant (a “Warrant”) of the Company. Each Warrant shall be exercisable to acquire one common share of the Company (a “Warrant Share”) at an exercise price of CDN$4.00 per Warrant Share for a period of 36 months from the closing date, subject to adjustment in certain events.
About Hemptown Organics Corp.
Hemptown is diversified, industry leading cannabinoid company delivering a diverse product offering across the value chain, in multiple sales channels, to meet the growing global demand for cannabinoid-based products. State of the art cultivation in Oregon’s Rogue Valley, FDA-licensed and cGMP certified product manufacturing, and a strong leadership team with Fortune 500 experience, including Kellogg’s, Nike and Intel, are the pillars for Hemptown’s growth model as the Company pushes into the consumer-packaged goods sectors with top quality white label and branded product lines for the consumer market. For more information, visit www.hemptownusa.com.
Hemptown Investor Relations
Hemptown Sales and General Inquires
Disclaimer for Forward-Looking Statements
This news release contains forward-looking statements that involve various risks and uncertainties regarding future events. Such forward-looking statements are based on current expectations of management, involve a number of risks and uncertainties, and are not guarantees of future performance. These statements generally can be identified by the use of forward-looking words such as “may”, “should”, “will”, “could”, “intend”, “estimate”, “plan”, “anticipate”, “expect”, “believe” or “continue”, or the negative thereof or similar variations. Forward-looking statements in this news release include statements regarding the proposed acquisition of Hempacco and Pacifica Premiums, and the proposed Offering. Forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties and other factors that may cause actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results or events to differ materially from current expectations include general market conditions, significant business, competitive, political and social risks and other factors beyond the control of the Company. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law.
Because Hemptown is not a reporting issuer in any jurisdiction in Canada, all of the securities issued in the proposed Offering will be subject to an indefinite hold period under applicable securities laws. In addition, none of these securities will be registered under the United States Securities Act of 1933, as amended (the “1933 Act”), and none may be offered or sold in the United States absent registration or an applicable exemption from the 1933 Act. This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of the securities, in any state where such offer, solicitation or sale would be unlawful.
 Grandview Research