On Wednesday (May 23) a venture cannabis company announced a partnership with an up and coming retail operator to enhance retail distribution and create branded cannabis lounges.
The partnership is between Newstrike Resources (TSXV:HIP), who made an official a strategic investment partnership with Inner Spirit Holdings. According to the announcement, both companies will obtain equity interests in the other and begin working on the retail distribution of Up Cannabis, Newstrike’s main recreational brand, products. The partnership will also work to develop “experiential hubs” for future consumers.
“We look forward to working with Spiritleaf to enhance Up’s distribution reach and successfully building our businesses in a complementary and strategically aligned manner,” Jay Wilgar, CEO of Newstrike said in a statement.
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This partnership will cost Newstrike approximately and aggregate value of C$1.12 million worth of shares at C$0.90 per share plus C$1.125 million in cash. Newstrike’s previous closing price for Wednesday was C$0.87 per share.
As part of the deal Inner Spirit will issue 15 million units of the company, at a price of C$0.15 per unit, to Newstrike during the company’s proposed initial public offering.
The announcement confirmed Inner Spirit’s stock will be listed on the Canadian Securities Exchange (CSE). The company plans to launch its stock through an initial public offering (IPO) offering of 7 million units minimum and 15 million at most for a C$0.15 price per unit. Inner Spirit expects gains between a range of roughly C$1 million and C$2.25 million
Last November, Inner Spirit announced the execution of 55 franchise agreements across Canada with the intention to convert these into legal recreational cannabis dispensaries.
The retail cannabis space company boasts of owning a membership to the Canadian Franchise Association and working on the development of over 100 franchises.
Darren Bondar, president and CEO of Inner Spirit said this partnership will allow for future consumers to obtain an all around combination experience of “cannabis, music, education and community.”
Following Wednesday’s announcement, shares of Newstrike dipped 18.39 percent to $0.71 as of 2:49 p.m. EST on Thursday (May 24).
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.