LGC Capital Closes Investment Into Quebec-Based Future Medicinal Cannabis Grower AAA Trichomes

MONTREAL, Jan. 8, 2018 /CNW Telbec/ - LGC Capital Ltd. (TSXV: LG) ("LGC") is pleased to announce that it has successfully finalized the transaction with Québec-based Tricho-Med Corporation (doing business as "AAA Trichomes"). As reported in prior news releases, LGC entered into a four-year secured convertible loan agreement with AAA Trichomes in an amount of $4 million CDN (the "Loan"), which will be disbursed in accordance with a pre-agreed milestone disbursement schedule. Upon AAA Trichomes obtaining a license to produce medical cannabis from the relevant regulatory authorities, the Loan will convert into common shares of AAA Trichomes representing 49% of AAA's then-issued and outstanding shares. LGC will also receive a 5% royalty on AAA Trichomes' net sales.

This transaction represents LGC's first investment into the Canadian cannabis sector and paves the way for further related opportunities in Canada. Weather permitting, excavation and foundation work of Phase 1 will begin within weeks of this closing and the 30,000 square foot state of the art growing and processing facility is expected to be completed by the fall of 2018. While construction is underway, plans for Phase 2 and Phase 3 expansions will be taking shape with a view to and will lead to having in excess of a million square feet of cultivating and processing capacity within a few years. Key elements of this expansion are already in place, including signed land purchase options, favorable zoning, as well as a 25KVA power line running over the properties.

John McMullen, CEO of LGC Capital states, "We have learned throughout our due diligence process that AAA is not just a solid investment for LGC shareholders, but an excellent one. The team at AAA Trichomes has laid the foundation to establish itself as one of the largest growing operations of medical cannabis in Quebec and Canada. When we factor in anticipated land, power and water costs, we truly believe that AAA will stand above many Canadian competitors.  We look forward to updating the market on this opportunity as things progress.

Michel Gaucher, CEO of AAA Trichomes stated, "AAA Trichomes welcomes the investment and association with LGC's experienced team, scope of vision and reach within the worldwide cannabis market. AAA is now ready to accelerate the construction of its facility in Brownsburg, Quebec. Once we have constructed our facility we fully expect that it will satisfy Health Canada's requirements for the approval of a "License to Produce." Construction completion is planned for the last quarter of 2018. AAA is set to become one of the lowest cost large-scale producers of high-grade cannabis in Canada. The execution by AAA of its acquisition strategy of a substantial inventory of strategically zoned and serviced land areas will drive the development in future phases of two new large-scale controlled environment facilities, supported by the most competitive power costs in Canada."

About LGC Capital Ltd. (www.lgc-capital.com)

LGC Capital Ltd. is a Canadian incorporated public company listed on the TSX Venture Exchange (TSXV: LG). LGC's objective is to become a diversified business group with core business divisions that provide shareholders with exposure to a diverse range of businesses, products and services.

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SOURCE LGC Capital Ltd