VANCOUVER, British Columbia, Jan. 09, 2018 (GLOBE NEWSWIRE) — Cannabis Wheaton Income Corp. (d/b/a Wheaton Income) (TSX-V:CBW) (“Wheaton Income” or the “Company“) is pleased to announce that it has entered into an investment agreement (the “InvestmentAgreement“) with Inner Spirit Holdings Ltd. (“Inner Spirit“) providing for a strategic investment by the Company in Inner Spirit, as well as a strategic alliance agreement (the “Strategic Alliance Agreement“) that will govern the ongoing business relationship between the parties (collectively, the “Transaction“).
Inner Spirit is the parent company of Spirit Leaf Inc. (“Spirit Leaf“), which aims to be a market leader in the franchising of retail cannabis dispensaries in jurisdictions in Canada where the private distribution of recreational cannabis is legalized. Inner Spirit has currently executed over 95 franchise agreements in Canada for proposed retail locations (each an “Spiritleaf Retail Dispensaries“).
Under the terms of the Investment Agreement, the Company will acquire 15,000,000 common shares of Inner Spirit (the “Inner Spirit Shares“), representing approximately a 18.5% of the outstanding Inner Spirit Shares. In exchange for the Inner Spirit Shares, the Company will provide Inner Spirit with: (i) a cash payment of $350,000, (ii) 674,418 common shares of the Company, each with an issue price of $2.15 per common share, and (iii) 1,250,000 common share purchase warrants of the Company (the “Warrants“), exercisable at $2.53 per common share for a period of 24 months from the closing of the Transaction. The Warrants are subject to certain vesting conditions related to Spirit Leaf achieving certain operational milestones.
Under the terms of the Strategic Alliance Agreement, the Company and Inner Spirit have agreed to enter into a supply agreement (the “Supply Agreement“) granting the Company with the exclusive right to supply up to 50% of Inner Spirit’s annual inventory requirements for any cannabis, cannabis-infused or cannabis-derived products (collectively, “Cannabis Products“) to be sold at Spiritleaf Retail Dispensaries. In addition to such exclusive supply right, the parties have agreed that the Supply Agreement will contain a mutually agreeable profit-sharing arrangement relating to sales of Cannabis Products. The parties have agreed to use their best efforts to enter into the Supply Agreement within 60 days following the closing of the Transaction.
“We are excited to form this alliance with Wheaton Income as strategic partners,” said Darren Bondar, President and CEO of Inner Spirit. “Their wealth of knowledge in the cannabis industry is a great asset for our company and our franchise partners. Upon legalization of recreational cannabis, we look forward to offering Wheaton and their streaming partners’ brands in Spiritleaf dispensaries and having a diverse and unique offering that customers will not be able to find anywhere else.”
Hugo Alves, President of Cannabis Wheaton stated, “Securing access to high-value distribution channels will bring tremendous benefit to Wheaton and all of our streaming partners. The strategic alliance with Inner Spirit allows us to partner with a strong management team with a successful track record of running multi-franchise retail operations which will give our streaming partners access to a strong distribution platform through which to showcase their products and brands. Darren and his team have designed an incredible concept for the dispensaries to create a high-end retail experience that we’re excited to be a part of.”
Closing of the Transaction is expected to occur on or prior to January 12, 2018, subject to the receipt of all required approvals, including the approval of the TSX Venture Exchange.
About Wheaton Income
Wheaton Income is a collective of entrepreneurs with a passion for the cannabis industry past, present and future. Our mandate is to facilitate growth for our partners by providing them with financial support and sharing our collective industry experience. Our partners all have different visions, voices and brand values, and all share a common goal—to build a world-class industry based on ethics, diversity, quality and innovation.
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For more information about investing in Cannabis Wheaton, please visit: http://www.wheatonincome.com
or contact our investor relations team at: 800.980.1314 or IR@wheatonincome.com. Follow up on Twitter @WheatonIncome.
Media Contact:
Sarah Bain, VP External Affairs
Email: sarah@cannabiswheaton.com
Phone: 613.230.5869
About Inner Spirit
Inner Spirit is a specialty retailer and franchise company that is applying its successful model to the recreational cannabis market. The first and only Canadian cannabis company to be granted Canadian Franchise Association Membership to date, Inner Spirit intends to establish a chain of recreational cannabis dispensaries under its Spiritleaf brand, with the vision of becoming the leading private recreational cannabis retail chain in Canada. Spiritleaf aims to be the most knowledgeable and trusted source of recreational cannabis, offering a premium consumer experience with high-quality product brands.
For further information: Investor Enquiries: Darren Bondar, Chief Executive Officer, (403) 930-9303, darren.bondar@spiritleaf.ca; Franchise Enquiries: Courtney Richer, Franchise Relations, (403) 930-9300, franchise@spiritleaf.ca