Canadian company Zenabis Global has completed an acquisition of a 51% stake in Calgary-based Hilllsboro Corp (True Buch).

True Buch is involved in the creation of cultured tea beverages, including kombucha. Its products are raw, unpasteurised, gluten-free, non-genetically modified organism (GMO) and feature more than 11 flavours.

Both companies will use their expertise to infuse cannabis into True Buch products to create a cultured tea beverage cannabidiol (CBD) or tetrahydrocannabinol (THC) product.

Zenabis has acquired a majority stake by issuing 455,947 common shares of Zenabis to True Buch’s shareholders.

In addition to the closing payment, True Buch’s shareholders will be entitled to cash earn-out payments based on the future financial results of True Buch that exceed the forecast.

Zenabis has the option to purchase the remaining 49% stake in True Buch at eight times the earnings before interest, tax, depreciation and amortisation (EBITDA) rate for the preceding 12 months payable in cash on or after the second anniversary of the date of the agreement.

“True Buch is involved in the creation of cultured tea beverages, including kombucha.”

Bevo Agro and Sun Pharm completed a reverse takeover on 8 January 2019 to become Zenabis Global. The plans were announced on 4 October 2018.

Zenabis then entered an agreement with a Canadian-chartered bank on 21 January 2019 for a $51m credit facility.

As of 28 January 2019, 70% of Zenabis common shares were contributed to the Pooling Agreement announced 21 December 2018.

The company has distribution relationships with the Canadian Government, as well as third-party retailers and distributors in New Brunswick, Price Edward Island and Yukon Territory.

Zenabis has facilities in New Brunswick, British Columbia and Nova Scotia, and has recently added modern greenhouses in Langley, which provides Zenabis with 3.5millionft² of facility space.

The company will use an additional 700,000ft² of greenhouse space to continue the propagation business.

These facilities are expected to have a capacity to yield 479,700kg of dried cannabis annually.

The Zenabis brand name is used in the medical market, while Namaste is used to service the recreational market.