Mr. Keith Dolo reports
SPROUTLY ANNOUNCES JOINT VENTURE WITH MOOSEHEAD BREWERIES TO LAUNCH CANNABIS-INFUSED BEVERAGES IN CANADA
Sproutly Canada Inc. and OCC Holdings Ltd., an affiliate of
Moosehead Breweries Ltd., have entered into a definitive agreement to form an exclusive joint venture (JV) 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, chief executive officer of
Sproutly Canada, and Matthew Oland, Moosehead executive and incoming CEO
of the JV, at 9:30 a.m. ET on May 1, 2019.
Joint venture highlights:
- Partnership with the oldest and largest independent brewery in
- Moosehead has over 152 years of brewing experience through six generations of
Moosehead has more than 140 million cans/bottles of beer sold annually
throughout Canada, the United States and in 15 other countries
around the world.
The Oland family has 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 five
minutes and last up to 90 minutes, providing an edible cannabis
experience similar to traditional flower cannabis without the need
to inhale smoke.
- It has the
ability to address the industry challenges of overconsumption of
oil-based edibles and beverages.
- It has the
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
- It has the
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 research and development 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 licence 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, will lead the joint venture as chief executive officer.
Moosehead will provide infrastructure support, such as research and development,
operations, procurement, finance, and distribution.
Sproutly will 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 five years with a possible two-year
The JV will have the ability 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 versus 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
Infuz2O," commented Keith Dolo, CEO and
a 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 Mr. 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 CEO 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 Infuz2O 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
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 CEO and
Sproutly shall appoint the chairperson of the board of directors of the
Sproutly will provide Infuz2O exclusively to the joint
venture in canada for the purpose of producing cannabis beverages
(excluding hemp) for a period of five years,
such exclusivity period being 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.
Novus Merchant Partners Inc. acted as the exclusive financial adviser to
Sproutly in connection with the joint venture.
Conference call information
Sproutly will host a conference call with Keith Dolo, CEO of Sproutly
Canada, and Matthew Oland, Moosehead executive and incoming CEO of the
JV, at 9:30 a.m. ET on May 1, 2019. Please dial in five minutes to 10
minutes prior to the scheduled start time.
Canada/United States toll-free: 1-800-319-4610
International toll: 1-604-638-5340
A presentation related to the joint venture is available on Sproutly's
Infuz2O is a naturally water-soluble cannabis solution, which
fully dissolves in water and can be directly added in beverage
formulations to deliver the effects of the cannabis plant. Infuz2O's
features include the following:
- Rapid onset of less than five minutes to feel the effects of cannabis:
Fast offset/clearing of the cannabis effect within 90 minutes of
consumption, allowing for more usage occasions;
- No added chemicals like those used in emulsifiers or encapsulation;
- Delivers the cannabis strain experience through a beverage, that
currently can only be experienced through smoking;
Produced using all GRAS-certified (generally recognized as safe) ingredients without the use of
organic solvents of carbon dioxide, thereby preserving the full plant experience.
About Sproutly Canada Inc.
Sproutly's core mission is to become the leading supplier to the
cannabis beverage and edibles market. The company's Toronto-based
facility, licensed under the Cannabis Act, was built to cultivate
pharmaceutical-grade cannabis to supply a technological breakthrough in
producing and formulating the first natural, truly water-soluble
cannabis solution. The company's water-soluble ingredients and its bio-natural
oils will deliver revolutionary brands to international markets that are
clamouring for well-defined commercial products. Sproutly's business
focus is to execute on partnerships with local and globally established
consumer brands to leverage their existing customer bases, further
expand brand loyalty, assist with marketing and support distribution
networks to deliver this scientific breakthrough with speed and
We seek Safe Harbor.
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