- CordovaCann (CSE:CDVA) has signed a letter of intent to acquire a majority stake in cannabis retail venture, 2734158 Ontario Inc
- Upon closing the deal, CordovaCann will be able to open five recreational cannabis stores in Ontario, with rights to apply for 75 more in the next 18 months
- Under the terms of the deal, CordovaCann will acquire 50.1 per cent of 2734158 Ontario for C$723,000
- The stores will be operated by 2734158 Ontario under the recently acquired Starbuds brand name
- CordovaCann (CDVA) is up 20.37 per cent, and is trading for $0.32 per share
CordovaCann (CSE:CDVA) has signed a letter of intent to acquire a majority stake in cannabis retail venture, 2734158 Ontario Inc.
2734158 Ontario recently secured a cannabis retail operating license from the Alcohol and Gaming Commission of Ontario. The license will allow the company to apply to open a maximum of 75 stores in the province. Five of those stores have already been authorised.
By acquiring a majority stake in 2734158 Ontario, CordovaCann will open the five approved stores under its Starbuds brand.
2734158 Ontario will subsequently manage the operations and buildout. CordovaCann will supply store designs and layouts, standard operating procedures, staff training, financing resources, and systems support.
Three of the five stores will be located in Barrie, with the remaining two in Bradford and Alliston. The company expects that all of these outlets will open in the next few months.
CordovaCann’s Chairman and CEO, Taz Turner, commented on the company’s growing footprint.
“We are excited about the opportunity to expand our portfolio of retail locations in Canada under the Starbuds brand. Ontario is a very attractive market, given that it is in the early stages of rolling out cannabis stores.
“We anticipate that the first five stores will generate cash flow quickly. We look forward to opening many more locations in Ontario in the future,” he added.
Under the LOI’s terms, CordovaCann will invest C$723,000 in exchange for a 50.1 per cent stake in 2734158 Ontario. In addition, the company has granted CordovaCann right of first refusal on any future sales of shares in 2734158 Ontario.
Chris Jones, President of 2734158 Ontario, added to Turner’s sentiments, expressing his confidence in the growing Ontario market.
“We are confident in the proven Starbuds brand name. We look forward to expanding our Ontario footprint, generating substantial shareholder value, and ensuring that consumers in our province have exceptional retail experiences,” he said.
CordovaCann (CDVA) is up 20.37 per cent, and trading for $0.32 per share at 12:11pm EST.
