Sproutly Canada, Inc., and OCC Holdings Ltd., an affiliate of Moosehead Breweries Limited have entered into a definitive agreement to form an exclusive joint venture to develop, produce, and market non‐alcoholic cannabis-infused beverages in Canada using Sproutly’s proprietary, naturally produced water soluble cannabinoids known as “Infuz2O”. Both companies will bring their respective strengths to the joint venture to develop a line of great tasting cannabis beverages featuring a rapid onset and offset effect unique to the category.
Some highlights of the Joint Venture according to Sproutly and OCC Holdings Ltd.:
Andrew Oland, Chief Executive Officer of Moosehead said in a release “with the anticipated legalization of edibles in Canada later this year, Moosehead has made the strategic decision to enter the cannabis beverage market” and that the company is “uniquely positioned” to be a leader in the cannabis beverage category.
Terms of the Joint Venture
The Joint Venture will be structured as a standalone company with its own board of directors and management team. Sproutly and Moosehead will each hold a 50 per cent interest in the JV and have the right to nominate three directors. Moosehead shall appoint the Chief Executive Officer and Sproutly shall appoint the Chairperson of the board of directors of the JV.
Sproutly will provide Infuz20 exclusively to the Joint Venture in Canada for the purpose of producing cannabis beverages (excluding hemp) for a period of five years, subject to a potential extension based on the Joint Venture reaching certain revenue targets.
The formation of the Joint Venture is subject to the satisfaction of certain conditions, including the execution and delivery of various transaction agreements, governance documents and supply agreements. The parties expect to form the Joint Venture on or before May 31, 2019.
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