Sproutly Announces Joint Venture With Moosehead Breweries to Launch Cannabis-Infused Beverages in Canada

CANADA: Sproutly Canada, an affiliate of Moosehead Breweries Limited, are pleased to announce that they 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. Sproutly will host a conference call with Keith Dolo, CEO, Sproutly Canada and Matthew Oland, Moosehead executive and incoming CEO of the JV, at 9:30am Eastern Time on May 1, 2019.

Joint Venture Highlights:

  • Partnership with the Oldest and Largest Independent Brewery in Canada
    • Over 152 years of brewing experience through six generations of family ownership
    • More than 140 million cans/bottles of beer sold annually throughout Canada, the United States and in 15 other countries around the world
    • Oland family’s proven ability in building, marketing and selling industry leading beers such as Moosehead Lager, Moosehead Radler, Alpine, and Hop City Barking Squirrel
  • Competitive Advantage Driven by Infuz2O
    • The JV beverages can deliver the cannabis effect as early as 5 minutes and last up to 90 minutes, providing an edible cannabis experience similar to traditional flower cannabis without the need to inhale smoke
    • Ability to address the industry challenges of overconsumption of oil-based edibles and beverages
    • Capability to produce a clear cannabis beverage that is much easier and faster to formulate than its competitors who will be using emulsifiers, encapsulation or chemical modification techniques
    • Ability to deliver functional beverages that address a “need state” by producing cannabis strain specific experiences
    • Natural Infuz2O process allows for a premium consumption experience and taste profile
  • JV Well Positioned to Enter Cannabis Beverages Upon Legalization
    • Moosehead’s beverage experience and R&D formulation capabilities will ensure that the cannabis beverages produced will be premium in quality and have a great taste profile
    • Moosehead’s established operational infrastructure will allow the Joint Venture to fast track its go-to-market strategy
    • Sproutly’s cultivation facility and processing license will advance the formulation work that has been completed to date as well as production scale up
  • Alignment of Interests
    • The Joint Venture is structured as a 50/50 equity ownership
    • Matthew Oland, one of Moosehead’s senior executives and Oland Family member, to lead the Joint Venture as Chief Executive Officer
    • Moosehead to provide infrastructure support such as R&D, operations, procurement, finance, and distribution
    • Sproutly to provide proprietary custom compositions using Infuz2O for cannabis beverages in Canada
    • JV will have exclusive rights to utilize Infuz2O for cannabis beverages for a period of 5 years with a possible 2-year extension
    • Ability for the JV to enter the European market once recreational cannabis use is legalized

“With the anticipated legalization of edibles in Canada later this year, Moosehead has made the strategic decision to enter the cannabis beverage market. As one of the oldest brands in Canada and a leader in the beer category, we believe we are uniquely positioned to be a leader in the cannabis beverage category.” said Andrew Oland, Chief Executive Officer of Moosehead. “As a 152 year old company spanning six generations, we are very selective about new business opportunities. After a significant amount of due diligence on Sproutly’s APP technology and Infuz2O water soluble cannabinoids vs other competitive technologies, we are excited to announce this joint venture. With their advanced technology and our long-standing product development experience, we expect to bring to Canadian consumers cannabis beverages that address the major issues currently limiting appeal of this category in other markets; a beverage that: 1) actually tastes good; and 2) provides an immediate and controllable cannabis experience lasting up to 90 minutes.”

“Moosehead is a truly iconic brand and we are very excited to partner with a company that possesses such deep-rooted Canadian heritage and over 152 years of history in the beer industry. Partnering with a company of this caliber is a strong validation of APP Technology and Infuz20.” commented Keith Dolo, Chief Executive Officer and Director of Sproutly. “This partnership with Moosehead marks an important milestone in Sproutly’s mission of delivering a safe and consistent whole plant experience from cannabis, with a lead position in the beverage market. We have developed a relationship with Moosehead built on trust and our shared vision of creating safe, responsible and high-quality cannabis beverages and we look forward to making this a reality for Canadian consumers”, added Dolo.

“After careful analysis of the cannabis industry and the cannabis beverage opportunity in Canada, we believe that Moosehead and Sproutly together are well positioned to become a significant player in the category.” said Matthew Oland, incoming Chief Executive Officer of the Joint Venture. “The JV’s ability to leverage Moosehead’s rich history of building adult-beverage brands, and its established R&D and operational infrastructure, will enable the JV to bring great tasting cannabis beverages to Canadian consumers. The Infuz20 technology delivers a natural cannabis beverage experience, with an onset and offset time similar to traditional flower cannabis, without the need for chemical modification. We believe this will be a game changer for the sector.”

INDIVA and Bhang Corporation Create Canadian and International Joint Venture

CANADA: INDIVA Limited has announced a 50/50 joint venture with, and a USD $1 million investment into, Bhang Corporation, an award-winning licensor of cannabis and CBD edibles and concentrates. The joint venture, which is managed by INDIVA, has exclusive rights to manufacture and sell Bhang products in Canada and the right to export those products internationally.

Bhang is an intellectual property company which licenses rights to a full range of cannabis and CBD products, including chocolates, gums and oral sprays, isolates, vapes and vape cartridges and accessories. Through the JV, INDIVA becomes the exclusive licensed manufacturer and distributor of a full array of award winning products in Canada and the exclusive licensed exporter of such products internationally.

The JV will be operated through an Ontario corporation owned 50/50 by INDIVA and Bhang.  INDIVA is the manager of the JV and has committed to investing USD $5 million in building cannabis processing infrastructure and, in addition to being able to use such infrastructure to produce INDIVA branded products, making that infrastructure available to the JV. Bhang is contributing its know-how and intellectual property, including its trademarks and patents, to the JV and will collaborate with INDIVA on sales and marketing. Each of the parties has committed to contribute equally to the working capital of the JV.

It is expected that the cannabis and CBD products produced by the joint venture will be sold in Canada primarily in the adult-use cannabis market (sometimes referred to as “the recreational market”), which is expected to launch in the summer or fall of 2018. Subject to compliance with applicable laws and regulations, it is expected that Bhang branding will be most prominent on the packaging but all packages will also visibly display INDIVA branding i.e. “Powered by INDIVA”.

“The joint venture allows us to leap frog over the years and millions of dollars of research and development that other Canadian licensed producers will need to spend to successfully produce high quality cannabis and CBD products,” explained Koby Smutylo, Chief Operating Officer and General Counsel, INDIVA. “We will also benefit from the large consumer following Bhang products enjoy in Canada and worldwide,” he continued.

“Our stated strategy is to build a strong and experienced team” commented Niel Marotta, Chief Executive Officer, INDIVA. “This joint venture and other strategic relationships we are building in Canada, and internationally are the further manifestation of this strategy.”