TORONTO, Sept. 20, 2018 /CNW/ – FSD Pharma Inc. (“FSD” or the “Company”) (CSE:HUGE) is pleased to announce that pursuant to the approved construction and development budget announced on July 3, 2018 (Link), Auxly Cannabis Group Inc. (TSX.V – XLY) (“Auxly”) has made an equity investment into the Company at $1.00 per Class B Subordinate Voting Share for total proceeds of $7.5 million. No fees were paid to brokers in connection with the transaction.
All of the securities issued in connection with the Offering are subject to a hold period expiring on January 20, 2019.
Proceeds of the financing will be deployed toward construction of the 220,000 square foot cultivation footprint that FSD and Auxly are jointly developing pursuant to their strategic alliance and streaming agreement previously announced on March 5, 2018 (the “Joint Cultivation Footprint”) (Link). The buildout of the Joint Cultivation Footprint is currently underway in Cobourg, Ontario and will include dedicated space for large scale extraction capabilities.
In addition to the Joint Cultivation Footprint, FSD is also implementing several technological advancements at the Cobourg facility aimed at increasing energy efficiency and post-harvest process automation. These advancements are anticipated to benefit the environment and the community of Cobourg through less demand on the local electricity grid and will reduce operating expenses to the Company.
Anthony Durkacz, Director of FSD Pharma commented, “We are honored by the investment from our partner Auxly and the faith they have placed in us considering this investment is being made at a premium to the current market price. We are moving ahead with plans to building out the world’s largest cannabis indoor hydroponic grow operation and working toward a Nasdaq listing.”