New Recreational Cannabis JV – The Blunt Investor


Aleafia Inc. (TSX: ALEF.V), primarily based in Concord, Ontario, announced this week it is joined Serruya Private Equity in a Joint Venture (JV).

Aleafia and the private equity firm program to make the enterprise a key recreational marijuana supplier with joint ownership more than new retail shops. The JV also intends to make a new weed brand.

In addition, the JV deal brought Aleafia a $10 million investment from Serruya and International Franchise. That deal foresees the launch of 20 retail shops internationally. Nonetheless, due to weed’s status as illegal at the federal level in the U.S., the JV did not consist of any plans for expansion there.

Aleafia – future rec industry leader?

“In launching adult-use cannabis operations, we will significantly advantage from functioning with and getting Serruya’s substantial monetary backing,” Aleafia CEO Geoffrey Benic mentioned.

Benic continued, concerning the chance in front of his enterprise, “these transactions will see Aleafia instantly assume a leadership function in adult-use cannabis production, provide and retailing, complementing our confirmed healthcare cannabis operations.

He continued, “Aleafia will also personal 51% of a Brands JV.”

That JV is set to operate beneath the name Flying Higher Brands.

Additional, the JV’s retail operations will operate beneath the name One particular Plant (Retail) Corp.

While Aleafia will initially only personal 9.9 % of the JV’s retail arm, the enterprise will have the appropriate to raise its ownership in the retail venture to 49%.

In the deal, Serruya will exchange $10 million for five million shares of Aleafia creating their obtain cost $two per share. Aleafia will also invest $five million CAD of the private placement proceeds back into the JV.

Aleafia to uplist?

Final month, Aleafia mentioned it applied to list on the Nasdaq exchange, a move up from its single listing on the Venture arm of the Toronto Stock Exchange.

When completed, the enterprise will be in the enterprise of a handful of Canadian marijuana stocks that lately uplisted. Aurora Cannabis (NYSE: ACB.N) and Canopy Development (NYSE: CGC.N), for instance, listed on the New York Stock Exchange this year.

Post-legalization headaches

Due to the fact recreational marijuana legalization, provide shortages have plagued the sector. Big delivery bottlenecks occurred through the very first month post-legalization.

Although the motives for delays are not clear, some recommend the provinces underestimated retail appetite for recreational marijuana.

Nevertheless, other people say the government’s gear approval and excise stamp issuance brought on key headaches and delays for the producers.

At the most current pot conference in Las Vegas, Aurora CEO Terry Booth took shots at the Ontario government. He singled out that province, which is Canada’s most populated, for operating a “sh*tshow” the weeks right after legalization.


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