Merchavia Announces First Investment Agreement in the Medical Cannabis Sector

The company to invest $400,000 in Veoli, which is developing breakthrough technology for medical cannabis oil consumption in precise dosages - without requiring heating

Sanara Ventures, Philips and Teva's investment platform, is Merchavia's partner in this venture

The unique technology does not require that the cannabis oil will be heated up, thus fully keeping its original and unchanged medical attributes, while allowing the administering of medical cannabis according to a predefined dose, directly to the patient's lungs (maximum effectiveness)

RAMAT GAN, Israel, March 19, 2019 /PRNewswire/ -- Merchavia Holdings and Investments (TASE: MRHL), an Israeli investment company specializing in early stage life sciences companies, announces that it has signed an investment agreement for allocating shares of Veoli, which develops technology for consuming cannabis in precise dosages without requiring heating or burning.

Merchavia will invest $400,000 for an allocation of 20% of Veoli share capital.

Veoli, a medical device sector company, will make use of innovative nebulization technology in the framework of an exclusive licensing agreement in the cannabis sector as part of a spinoff of one of Sanara Ventures portfolio companies. The licensing agreement is subject to approval and the signing of other agreements with a third party. In addition to Merchavia's investment, Sanara Ventures will invest $250,000.

This development represents part of the implementation of Merchavia's business strategy to invest in breakthrough technologies with significant global potential and with high rates of growth.

Eli Arad, CEO Mechavia: "We continue to build Merchavia's portfolio of promising companies. The Veoli deal represents the fulfillment of the business strategy of investing in breakthrough technologies, which provide an answer to existing medical needs in huge markets. Veoli's unique technology allows for the consumption of medical cannabis oil through inhalation, in a precise dosage without needing to be heated up, evaporated or burnt. This capability represents a massive advantage in the medical market where the need today, whether through smoking, evaporating or eating is not precise and cannot be controlled. In addition, Veoli's technology keeps the cannabis oil's properties without creating substances that enter the body during consumption as a result of heating up or burning. The medical cannabis sector has earned supportive regulation, legalization and legitimacy within the medical community both from the regulators and the physicians, so that we believe that the company's solution can be integrated into the cannabis market, which is demonstrating a high rate of growth. Due to this, we believe that the investment in Veoli will lead to creation of significant value for Merchavia's shareholders."

The aim of the investment is to adapt the technology to the cannabis sector and prove its technological ability to convey cannabis oil to the lungs in an effective and safe way.

About Veoli

Veoli makes use of medical device technologies in the field of pulmonary medicine for developing a unique device for the cannabis sector. This device is based on innovative technology that will allow patients to consume medical cannabis by inhaling a precise dosage that does not need to be heated up, evaporated or burnt. Veoli's main technology is based on a unique nebulizer device which is able to convert liquid (in this case a formula including cannabis extract) into isolated micron-sized drops, which can be inhaled and absorbed into the patient's lungs and conveyed into the bloodstream in a precise and effective way. This technology is seeking to overcome the existing restrictions in the existing methods of consuming cannabis, which for the most part cannot be consumed in a precise dosage. In addition, researchers have recent presented data according to which burning the active substance in cannabis at high temperatures (so that it will be active) may release damaging bi-products. According to research carried out by Global Market Insights Inc., the medical cannabis market, the medical cannabis market is expected to grow to $55 billion annually by 2024(([1])). Sales of cannabis concentrates to the cannabis market are expected to pass the $3 billion threshold by 2018(([2])). Cannabis users currently consume cannabis mainly through smoking, evaporation or through food products with these methods having several main disadvantages - a dosage that is not precise and cannot be controlled, changing the attributes of the cannabis and creating bi-products during the heating up or burning (which enter the patient's body in addition to the medical substances) and the inability to control the amount of active substances. Competition in the market includes evaporation devices of various types most of which do not include options for precise dosages, evaporators that include options for dosages including Syqe Medical, Ryah, and Cannakorp Inc. These evaporators require heating up the cannabis and thus changing the attributes and making it difficult for a precise dosage. To the best of the company's knowledge, as of this date, there are no existing technologies allowing the release of cannabis oil directly into the lungs without heating it up and without sufficient precision to allow dosage.

About Merchavia

Merchavia Holdings and Investments (TASE: MRHL) is an Israeli company specializing in investments in early-stage and promising startups operating in leading high-demand areas of the life sciences, working together with leading medical institutes worldwide - including Cleveland Clinic in the US. The company's management offices are in Ramat Gan. https://www.merchavia.com

([1]) https://www.marketwatch.com/press-release/at-36-cagr-medical-marijuana-market-will-bypass-55-bn-by-2024-2018-09-21
([2]) https://www.forbes.com/sites/julieweed/2018/09/20/vaping-propels-cannabis-concentrates-market-to-3-billion/#4624ad5c78a7

Contact:
Eli Arad
Eli@merchavia.co.il

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SOURCE Merchavia Holdings and Investments