September 18, 2018 - Vancouver, BC
NHS Industries Ltd. (CSE:NHS) (www.nhsindustries.ca) Carman Parente, President and CEO of NHS Industries Ltd., (“NHS” or the “Company”) is pleased to provide this letter and corporate update to shareholders and other stakeholders of the Company.
“As we move into the fall months, I wanted to communicate with our shareholders and provide an update on the Company’s progress and plans for the future. As shareholders are aware, NHS owns an agricultural property located in the Agricultural Land Reserve, (“ALR”) in Langley, British Columbia (the “Langley Property”). In the Company’s prospectus, which is available on SEDAR (www.sedar.com) (the “Prospectus”), management described its plans for the site, the existing structures and future possibilities. The site includes greenhouses, a portion of which are leased out to a long-standing tenant, and a significant quantity of peat moss which may be used for internal soil mixtures. Our plan is to add further infrastructure to the greenhouses to allow for more growing and processing capability. In the Prospectus, we outlined our plan to include a commercial kitchen within the greenhouse facilities to complement growers’ crops and allow them to add value to their agricultural output. The area where the peat moss is situated will ultimately become the building site for a warehouse facility designed to support the operations in the greenhouses.
Removal of the peat moss and its replacement with fill, to facilitate the building of a foundation for the greenhouse, has been underway since the summer of 2017. It is a lengthy process which can only be undertaken during the warm, dry months of the summer. At the present time, we have removed approximately half the peat moss. The cost of this removal can be very high and I am pleased to have been able to negotiate with our contractor an arrangement whereby he is paid from the proceeds of the fill site fees and once the entire job is complete, we will reconcile the costs of excavation and fill fees.
Owning an agricultural property presents an exciting prospect for companies at this time, as the new recreational marijuana legislation is set to come into force in the coming weeks and many shareholders have wondered if NHS will venture into this area either as a grower or as a landlord.
We are very pleased to advise that we have reviewed the potential and are at this time making an application to the ALR board to have the Langley Property approved for non-farm use. This designation will allow us to build out the kitchen facilities, the warehouse and to install appropriate hard surface substrate in the greenhouses to permit licensed marijuana growers to operate on the Langley Property. This re-designation to nonagricultural use is a new requirement for agricultural properties in the ALR to prevent too much of the agricultural stock from being turned over to marijuana cultivation at the expense of food crops.
We believe that NHS has a very good chance of receiving the non-farm use status due to the fact that the land at the Langley Property is not suited to outdoor cultivation and the greenhouses have been standing on the site for many years now and have been underutilized due to the nature of the site not allowing for further construction of outbuildings such as barns, nor to animal husbandry because of the peat.
The application and review process will take several months, and this is where management will focus its energy over the fall and winter months. We are working with experts to assist us in filing a complete and substantial application to ensure the greatest possible chance of success. We are actively seeking growers interested in using our site and are reviewing the needs of potential marijuana operations that might use the site to allow us to build a custom facility that will suit their needs. If it turns out that the non-farm use application is not successful, NHS will look at building out its kitchen facility at another location and to provide services to growers from the surrounding area. There will be a strong need for processing facilities to meet the needs of growers who want to create value added products from their crops and NHS will be ready to meet those needs.
Along the way, management will keep you up to date on the progress of our application and our plans for the site. Thank you for your ongoing support as we work toward a thriving operation that will support this burgeoning and highly lucrative new industry.”
NHS owns 5.5 acres of prime agricultural land in Langley, BC that includes over 48,000 square feet of greenhouse capacity and 2700 square foot caretaker’s residence. The Langley Campus was recently spun out from its former parent – New Age Farm Inc. For further information about NHS, please consult the Company’s profile on SEDAR at www.sedar.com.
On Behalf of the Board of Directors
Carman Parente President and Chief Executive Officer
This news release contains forward-looking statements, which relate to future events or future performance and reflect management’s current expectations and assumptions. Such forward-looking statements reflect management’s current beliefs and are based on assumptions made by and information currently available to the Company. Readers are cautioned that these forward looking statements are neither promises nor guarantees, and are subject to risks and uncertainties that may cause future results to differ materially from those expected including, but not limited to completion of planned improvements on schedule and on budget, the availability of financing needed to complete the Company’s planned improvements on commercially reasonable terms, delays in obtaining statutory and/or regulatory approval for production plans, the ability to mitigate the risk of loss through appropriate insurance policies, among others. These forward-looking statements are made as of the date hereof and the Company does not assume any obligation to update or revise them to reflect new events or circumstances save as required under applicable securities legislation.
This news release does not constitute an offer to sell securities and the Company is not soliciting an offer to buy securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. This news release does not constitute an offer of securities for sale in the United States. These securities have not and will not be registered under United States Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold in the United States or to a U.S. Person unless so registered, or an exemption from registration is relied upon.
The Canadian Securities Exchange has neither approved nor disapproved the contents of this news release and accepts no responsibility for the adequacy or accuracy hereof.