CHEMISTREE ANNOUNCES LOI FOR WASHNGTON STATE ASSET ACQUISITION

  • Sunday, May 13th, 2018

CHEMISTREE ANNOUNCES LOI FOR WASHNGTON STATE ASSET ACQUISITION,

AND UP TO $2.1 MILLION NON-BROKERED PRIVATE PLACEMENT FINANCING;

-Company to Complete Change of Business Filing

Vancouver, British Columbia, May 11, 2018 – Chemistree Technology Inc. (Canadian Securities Exchange: CHM) (US OTCQB: CHMJF) (the “Company” or “Chemistree”) is pleased to announce that the Company has entered into a letter of intent with arm’s-length parties to acquire, through a wholly-owned subsidiary, a suite of Washington-based assets used in cannabis cultivation, production, distribution and branding. The acquisition is subject to the execution of definitive agreements, completion of the required financing and all shareholder and regulatory approvals, including approval of the Canadian Securities Exchange (the “CSE”).

The asset acquisition includes certain of the assets used in the business of operating the “Sugarleaf” brand, including, but not limited to, all brands, trademarks, websites, URLs, packaging, goods in process, social media accounts, inventory, vehicles, leases, software, furniture, systems, equipment, lighting, assignments, client lists and marketing materials. The acquisition does not include any receivables, payables, warranties, employee or tax liabilities.

In a parallel process and subject to the asset acquisition, a Washington-based strategic partner of Chemistree (the “Partner”) will acquire the Washington State I-502 Tier 3 Producer/Processor License No. 423406 (the “License”) from Sugarleaf Farm, LLC (“Sugarleaf”). The license acquisition is subject to Washington State Liquor and Cannabis Board (“WSLCB”) approval. Chemistree also anticipates securing rights to the property used in connection with License. Chemistree believes that the licensed premises can be secured on commercially acceptable terms

Restrictions under I-502 prohibit the Company and/or its subsidiaries from having any direct interest in proceeds of production, processing or retail marijuana activities in Washington. The Company and/or its subsidiaries can, however, lease property and license its brands, production and consulting services to approved Washington State marijuana license holders. This will allow Chemistree to ensure that all products produced under the Chemistree program and/or associated under the brand meet or exceed the Chemistree brand quality standards. Chemistree and Partner anticipate entering into certain of the foregoing leasing and operating arrangements on mutually agreeable terms.

Consideration for the asset acquisition will be US$1,000,000 payable in cash.

Following completion of the asset acquisition and related agreements, Chemistree expects to generate revenue through leasing turn-key premises, licensing its brands, and providing production and consulting services to Partner as well as other approved State of Washington license holders, but will not be directly involved in the production, processing or retail cannabis activities.