Hempshire Enters into US$1.25 Million Purchase Agreement for MOUNTAIN® Smokes Sales in Europe and the European Union (EU)
September 15th, 2022
News, Top News
CALGARY, AB, Sept. 15, 2022 /CNW/ – The Hempshire Group, Inc. (TSXV: HMPG) (“Hempshire” or the “Company“), a California-based non-tobacco and non-nicotine smokable alternatives company that formulates and sells its own proprietary brand of cannabidiol hemp smokes (“CBD Hemp Smokes“) under the MOUNTAIN® Smokes label, announces the execution of a binding US$1.25 million purchase agreement (the “Purchase Agreement“) with European exclusive master distributor Montagnaria Group AG (“Montagnaria“), in respect of MOUNTAIN® Smokes destined for Europe and the European Union (“EU“).
The Purchase Agreement follows Hempshire’s recent receipt of approval to sell MOUNTAIN® Smokes in Belgium, resulting in access to the entire EU through member state reciprocity, as previously announced in the press release dated September 7, 2022.
The Purchase Agreement includes a binding commitment from Montagnaria to purchase a minimum of US$1.25 million of MOUNTAIN® Smokes over the twelve-month period from September 2022 through to August 2023. All purchase orders under the Purchase Agreement require a payment of fifty percent of the total purchase order upon issuance, and payment of the balance prior to the order being shipped by Hempshire.
The Purchase Agreement was executed to facilitate an orderly and efficient roll-out of MOUNTAIN® Smokes across Europe and the EU. Hempshire is working closely with Montagnaria to ensure the MOUNTAIN® Smokes product complies with individual member nations’ specific ‘local’ regulations, such as packaging in the local language, and inclusion of any locally required warning labels.
Through its initial test orders in 2021, Montagnaria has been successful in the placement of MOUNTAIN® Smokes into approximately 400 retail stores and smoke shops throughout Switzerland. In addition, Montagnaria was a key partner in assisting Hempshire to obtain Belgian government approval to sell MOUNTAIN® Smokes in that country, opening the door to the entire EU. Montagnaria will also be arranging European warehousing and fulfillment facilities to facilitate servicing of retailer accounts, convenience stores and smoke shops across Europe, and will be working closely with Hempshire to finalize a European-wide sales and distribution plan.
“Penetrating the US$261 billion1 tobacco products market in Europe is one of our top priorities.” stated Martin Marion, Hempshire President and CEO. “Montagnaria’s binding financial commitment to MOUNTAIN® Smokes highlights their excitement and belief in the product, and their expectations of a successful European roll-out strategy. We intend on dedicating significant resources alongside Montagnaria to help facilitate brand awareness, consumer demand, and sales in each European country where we introduce MOUNTAIN® Smokes.”
Incorporated in 2019, The Hempshire Group, Inc. formulates and markets its own proprietary brands under the MOUNTAIN® Smokes label with <0.3% THC, and MOUNTAIN® Zeros label with non-detectible, <0.0001% THC. These labels are offered in Natural, Pineapple Squeeze™ and Mint Squeeze™ flavors. MOUNTAIN® Smokes look, feel, burn, and are packaged like tobacco cigarettes, but without the harmful effects and addictive properties of tobacco and nicotine, and without additives or chemical preservatives. Hempshire also offers private white-labeling services and contract manufacturing services, through its partners, for non-owned CBD Hemp Smoke brands in the United States and internationally.
Information about the Company’s MOUNTAIN® Smokes line of CBD Hemp Smokes can be found at the Company’s ecommerce website at https://mountainsmokes.com.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words “expect”, “anticipate”, “continue”, “estimate”, “objective”, “ongoing”, “may”, “will”, “project”, “should”, “believe”, “plans”, “intends” and similar expressions are intended to identify forward-looking information or statements. More particularly, and without limitation, this news release contains forward-looking statements and information concerning: Hempshire’s business, strategies, expectations, planned operations and future actions; Hempshire’s intention and ability to grow its business, operations and product offerings through ecommerce, B2B sales and physical retailers, including establishing brand awareness in the US and internationally and developing white labeling and contract manufacturing collaborations; future sales in the EU; and Hempshire’s distributor relationship with Montagnaria, including pursuant to the Purchase Agreement and future purchase orders.
The forward-looking statements and information are based on certain key expectations and assumptions made by Hempshire, including expectations and assumptions concerning: the securities markets and general business and economic conditions, including the ongoing impact of COVID-19; the future operations of, and transactions completed by, Hempshire, including its ability to successfully implement its growth strategies and business plan; ongoing ability to conduct business in the regulatory environments in which Hempshire operates and may operate in the future; the ability of the Company to obtain and maintain suitable distributor partners and other strategic relationships; and applicable laws not changing in a manner that is unfavorable to Hempshire. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which have been used.
Although Hempshire believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because Hempshire can give no assurance that they will prove to be correct. By its nature, such forward-looking information is subject to inherent risks and uncertainties, which could cause the actual results and expectations to differ materially from the anticipated results or expectations expressed. Without limitation, these risks and uncertainties include: risks associated with the cannabis or hemp industries in general; the size of the emerging industrial hemp market; constraints on marketing products; risks inherent in the agricultural business; failure to benefit from partnerships; actions and initiatives of federal, state and provincial governments and changes to government policies and the execution and impact of these actions, initiatives and policies; Hempshire’s interpretation of and changes to federal and state laws pertaining to hemp; incorrect interpretation of the United States’ Agricultural Improvement Act of 2018; international regulatory risks; uncertainty caused by potential changes to regulatory framework; regulatory approval and permits; environmental, health and safety laws; anti-money laundering laws and regulations; banking matters; ability to access public and private capital and banking services; denial of deductibility of certain expenses; liability for actions of employees, contractors and consultants; product viability; accuracy of quality control systems; product recalls, product liability and product returns; positive tests for THC or banned substances; supply risk; reliance on third party suppliers, service providers and distributors; failure of counter-parties to perform contractual obligations, including in respect of the Purchase Agreement; industry and intra-industry competition; changing consumer preferences and customer retention; unfavorable publicity or consumer perception; inability to sustain pricing models; reliance on key inputs; effectiveness and efficiency of advertising and promotional expenditures; retention and recruitment of key officers and employees; inability to renew material leases; obtaining insurance; management of growth; risks related to acquiring companies and entering partnerships; infringement on intellectual property; inability to protect intellectual property; intellectual property claims; litigation; trade secrets may be difficult to protect; data security breaches; global economic uncertainty; geo-political risks; emerging industries; limited market for securities; financial reporting and public company obligations; and other factors more fully described from time to time in the reports and filings made by Hempshire with securities regulatory authorities.
In addition, Hempshire cautions that current global uncertainty with respect to the spread of the COVID-19 virus and its effect on the broader global economy may have a significant negative effect on Hempshire. While the precise impact of the COVID-19 virus on Hempshire remains unknown, rapid spread of the COVID-19 virus may continue to have a material adverse effect on global economic activity, and may continue to result in volatility and disruption to global supply chains, operations, mobility of people and the financial markets, which could affect interest rates, credit ratings, credit risk, inflation, business, financial conditions, results of operations and other factors relevant to Hempshire.
Readers are cautioned that the assumptions used in the preparation of forward-looking information, although considered reasonable at the time of preparation, may prove to be imprecise. Actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and accordingly there can be no assurance that such expectations will be realized. Hempshire undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law. The forward-looking information contained herein is expressly qualified by this cautionary statement.
Certain information contained herein has been obtained from published sources prepared by independent industry analysts and third-party sources (including industry publications, surveys and forecasts). While such information is believed to be reliable for the purposes used herein, Hempshire does not assume any responsibility for the accuracy of such information. Some of the sources cited in this news release have not consented to the inclusion of any data from their reports, nor has Hempshire sought their consent.
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