SAN DIEGO, Calif., March 1, 2013 /PRNewswire/ -- Medical Marijuana, Inc. (OTCPink: MJNA), a leading cannabis and hemp industry innovator, today announced that its subsidiary, PhytoSPHERE Systems, LLC ("PhytoSPHERE"), has entered into an agreement to sell certain of its assets to CannaVEST Corp. (OTCBB: FCLS) for $35,000,000. The assets sold to CannaVEST Corp. include certain equipment and inventory, web domain names, phone numbers, and all existing and pending agreements with hemp production and processing facilities. PhytoSPHERE also granted CannaVEST Corp. an exclusive license to use its brand names, logos and other "PhytoSPHERE" designations. The full text of the Agreement can be found in the Form 8-K filed by CannaVEST Corp. with the Securities and Exchange Commission on February 13, 2013.
Under the terms of the Agreement for Purchase and Sale of Assets (the "Agreement"), CannaVEST Corp. will pay PhytoSPHERE $35,000,000 in five (5) quarterly installment payments commencing on January 31, 2013 and ending December 31, 2013. Under the terms of the Agreement, CannaVEST Corp. may make its payments either in cash or by the issuance of common stock of CannaVEST Corp., based upon a pricing method as set forth in the Agreement. On January 29, 2013, CannaVEST Corp. made its first payment of $4,500,000 to PhytoSPHERE by the issuance of 900,000 shares of its common stock, priced at $5.00. PhytoSPHERE has distributed to the company 720,000 shares of the stock, based upon its 80% ownership of PhytoSPHERE.
The company and CannaVEST Corp. are currently negotiating the terms of a Supply Agreement whereby it is intended that CannaVEST Corp. will supply the company with its requirements for raw hemp oil product at favorable pricing, in exchange for the Company's agreement to purchase its requirements from CannaVEST. By allowing the company to focus on its core business of product development and market expansion in the growing cannabis and hemp industry, this transaction enhances shareholder value through increasing revenue and decreasing costs.
The company, through its portfolio company Red Dice Holdings, LLC (RDH), will leverage the Supply Agreement to provide high CBD concentrate Hemp oil for its Dixie Botanicals line of Hemp Wellness products. Dixie Botanicals launched in September 2012 and is now being distributed over-the-counter through its website (www.dixiebotanicals.com) and through select wholesale and affiliate distribution agreements. To date, thousands of customers have purchased Dixie Botanicals products with many joining the monthly auto-ship Compassionate Care Club. RDH plans to expand sales in 2013 through additional distribution agreements and well as through international sales.
Additionally, the company plans to expand sales of its CanChew Biotechnology CBD chewing gum in the early part of 2013. CanChew recently successfully completed a market trial of the gum with overwhelming positive feedback. Having a reliable and consistent supply chain of raw material ingredients as a result of the supply arrangement with CannaVEST Corp. will give the company a competitive advantage in the marketplace.
"We are pleased to reach an agreement with CannaVEST Corp. for the sale of assets of PhytoSPHERE Systems, LLC," stated Michelle Sides, Chief Executive Officer of the company. "We believe this transaction is beneficial to the company and its shareholders by eliminating the substantial capital commitment required by our production facilities to develop and produce our raw hemp oil, estimated to be $10 million during the first half of this year, while at the same time affording the company an ownership stake in CannaVEST Corp. We believe that with this acquisition CannaVEST Corp. is poised to become a leader in the CBD nutriceutical industry, and we are pleased to have an opportunity to obtain for the benefit of our shareholders a significant equity stake in the company. In addition, we are currently negotiating a supply arrangement with CannaVEST Corp. that will allow us to continue securing our raw product at favorable prices, but without the substantial capital outlay required by the PhytoSPHERE agreements."
This press release may contain certain forward-looking statements and information, as defined within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and is subject to the Safe Harbor created by those sections. This material contains statements about expected future events and/or financial results that are forward-looking in nature and subject to risks and uncertainties. Such forward-looking statements by definition involve risks, uncertainties and other factors, which may cause the actual results, performance or achievements of Medical Marijuana, Inc. to be materially different from the statements made herein.
About Medical Marijuana, Inc.
Our mission is to be the premier cannabis and hemp industry innovators, leveraging our team of professionals to source, evaluate and purchase value-added companies and products, while allowing them to keep their integrity and entrepreneurial spirit. We strive to create awareness within our industry, develop environmentally friendly, economically sustainable businesses, while increasing shareholder value. For more information, please visit the company's website at: www.MedicalMarijuanaInc.com.
Investor Relations Contact:
Stuart T. Smith
SOURCE Medical Marijuana, Inc.