It was just a matter of time before Sproutly Canada Inc (CNSX:SPR) (OTCMKTS:SRUTF) entered into a catalyzing deal in Canada. Judging from the details of today’s press release, the company did not disappoint.
Sproutly Canada just announced they have entered into a definitive agreement with Ott Holdings Ltd.—a Moosehead Breweries Ltd. affiliate—to form a joint venture to develop, produce and market cannabis-infused beverages for the Canadian market. The parties will utilize Sproutly’s unique soluble cannabanoid technology, known as Infuz20, to forge ahead. The end goal is to bring best-in-class non-alcoholic (at least until regulation change) beverages to market—similar in scope to what Hexo Corp. and Molson Coors are attempting today. That includes products that induce rapid onset/offset “highs” and predictable aggregate under-the-influence timelines.
Unlike the Hexo-Molson deal however, this joint venture is structured with 50/50 equity ownership. Sproutly Canada provides the distillation technology, which Moosehead will provide infrastructure support such as R&D, operations, distribution and more. The JV gives Moosehead exclusive rights to utilize Infuz20 for cannabis beverages for up to 5-years, with a possible 2-year extension. The venture will be lead by Moosehead senior executive Matthew Oland. No warrants or options are trading hands; this JV is truly a function of two equal partners with equal stake in the new entity’s overall outcome.
For those who may not be familiar with the Moosehead name, they are among the most popular independent beer brands in Canada. They are also the nation’s 4th largest brewery, with over 152 years of operating experience. Over the years, more than 140 million cans and bottles of beer have been sold—including internationally in all 50 U.S. states and 15 other countries worldwide. While Moosehead cannot be characterized as a global conglomerate in the same vein as Constellation Brands, they’re certainly a prestigious CPG company with their own identity. Overall, it’s another big win for Sproutly Canada, and continued validation of their APP technology.
Included in today’s presser is a link to a newly-made presentation related to the Joint Venture of both parties. It is available on Sproutly’s website www.sproutly.ca or available at the following hyperlink.
In advance of today’s release, shares in Sproutly Canada were halted. With the closing price just a stone’s throw away from its historical all-time high closing price of $0.96/share, SPR stock has come full circle.
After fading in the months following it’s RTO onto the Canadian Securities Exchange, Sproutly has battled back on the strength of important operational milestones with include the hiring of significant Tier-1 executive talent, a Jamaican cannabis-infused beverage JV, and more. Today’s news is probably the crown jewel of them all, as the company gradually fulfills the promises it made to investors way back when SPR RTO’d last July.
Midas Letter will continue monitoring the operational success of this, and other Sproutly Canada initiatives, as developments warrant.
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