Marijuana Company of America Acquires Interest in Licensed California Manufacturing & Distribution Company
ESCONDIDO, Calif., March 20, 2019 (GLOBE NEWSWIRE) -- via NetworkWire -- MARIJUANA COMPANY OF AMERICA INC. (“MCOA” or the “Company”) (OTC: MCOA), an innovative hemp and cannabis corporation, is pleased to announce that MCOA has entered into a letter of intent (LOI) with Natural Plant Extract of California (NPE) and its subsidiary, Northern Lights Distribution, LLC (NLD), to acquire a 20% ownership interest in NPE, and to establish a Joint Venture (JV) to operate a California cannabis delivery service named Viva Buds.
Under the terms of the LOI, MCOA has committed to contribute $2,000,000 in total cash to the project, as well as common shares of the Company with a value of $1,000,000. In exchange, MCOA will own a 20% equity position in NPE. In addition, both NPE and MCOA will form a JV to operate Viva Buds and will share in the profits on a 50/50 basis.
NPE has obtained both state and city licenses for volatile manufacturing, distribution and retail delivery of cannabis products. NPE has a long-term lease with favorable terms for its location at 11116 Wright Road, Lynwood, CA. NPE will manage all operations pertaining to distribution, manufacturing, and delivery of cannabis products, and MCOA will provide capital, consulting and marketing services. NPE is currently generating revenue through its distribution business segment under NLD, which it launched in 2018 and is undergoing construction of its manufacturing lab since it recently obtained all of the necessary state and local permits.
As part of the JV with NPE’s distribution company NLD, MCOA formed a wholly owned subsidiary called Viva Buds Inc. to serve as the marketing arm for NLD’s new retail delivery service in California. The Company will initially focus on delivering cannabis products to Southern California and then rollout to other cities statewide. NLD will contribute up to $300,000 in inventory of cannabis products to assist in the start-up of this venture and will oversee all delivery and fulfillment of orders. MCOA will provide a vast array of marketing services and technology to promote and build its Viva Buds brand.
The parties are in the process of conducting due diligence and completing a material definitive agreement.
Donald Steinberg, CEO of MCOA stated,
This partnership will enable MCOA to establish itself as a major player in the Cannabis arena. All licenses are in place to allow for vertical integration from farm to consumer. We are excited to expand our business model to now include marketing our new THC brand Viva Buds through our fully licensed partner NPE. The NPE team has a great deal of industry knowledge and has an industry disruptive business model. This is a huge strategic move for MCOA!
Alan Tsai, NPE’s CEO stated,
We are excited to become partners with MCOA as it will help us to finalize the development of our manufacturing plant faster than planned. We are aggressively focused on maximizing our market share by securing distribution, manufacturing and co-packing contracts with reputable brands throughout California. We believe that this is a crucial year for expansion in the cannabis industry in California and it’s our goal to position our company as a key player in the industry in multiple verticals.
About Natural Plant Extracts of California
NPE is a fully licensed cannabis manufacturing, distribution and non-store front retail delivery. The Company has secured its licenses with the state of California and city of Lynwood, CA. For more information about the Company, please visit its website at https://nldistribution.com
The owners and founders of NPE are marijuana industry veterans with decades of experience in establishing retail, manufacturing and distribution of cannabis in California, including obtaining the first retail dispensary licenses in Los Angeles, CA.
MCOA is a corporation which participates in: (1) product research and development of legal hemp-based consumer products under the brand name “hempSMART™”, that targets general health and well-being; (2) an affiliate marketing program to promote and sell its legal hemp-based consumer products containing CBD; (3) leasing of real property to separate business entities engaged in the growth and sale of cannabis in those states and jurisdictions where cannabis has been legalized and properly regulated for medicinal and recreations use; and, (4) the expansion of its business into ancillary areas of the legalized cannabis and hemp industry, as the legalized markets and opportunities in this segment mature and develop.
About Our hempSMART Products Containing CBD
The United States Food and Drug Administration (FDA) has not recognized CBD as a safe and effective drug for any indication. Our products containing CBD derived from industrial hemp are not marketed or sold based upon claims that their use is safe and effective treatment for any medical condition as drugs or dietary supplements subject to the FDA’s jurisdiction.
Forward Looking Statements
This news release contains "forward-looking statements" which are not purely historical and may include any statements regarding beliefs, plans, expectations or intentions regarding the future. Such forward-looking statements include, among other things, the development, costs and results of new business opportunities and words such as "anticipate", "seek", intend", "believe", "estimate", "expect", "project", "plan", or similar phrases may be deemed "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, the inherent uncertainties associated with new projects, the future U.S. and global economies, the impact of competition, and the Company's reliance on existing regulations regarding the use and development of cannabis-based products. These forward-looking statements are made as of the date of this news release, and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Although we believe that any beliefs, plans, expectations and intentions contained in this press release are reasonable, there can be no assurance that any such beliefs, plans, expectations or intentions will prove to be accurate. Investors should consult all of the information set forth herein and should also refer to the risk factors disclosure outlined in our annual report on Form 10-12G, our quarterly reports on Form 10-Q and other periodic reports filed from time-to-time with the Securities and Exchange Commission. For more information, please visit www.sec.gov.