- CordovaCann Corporation (CSE:CDVA) has signed a letter of intent to acquire retail and intellectual property assets from an unnamed seller
- The acquisition will allow the company to quickly establish a presence under an existing brand name
- CordovaCann will issue 18 million common shares to the vendors, with a net value of C$3,060,000
- The seller will have the option to appoint two directors to CordovaCann’s board
- CordovaCann (CDVA) is currently trading steadily at $0.17 per share
CordovaCann Corporation (CSE:CDVA) has signed a letter of intent to acquire retail and intellectual property assets from an unnamed US-based seller.
These include production and processing facilities in Colorado, Oregon, Nevada and California.
The acquisition will allow CordovaCann to quickly open five recreational and four medical cannabis stores under an established brand in Western Canada. In addition, the company will have the exclusive rights to open more stores in Alberta, British Columbia, Saskatchewan and Ontario.
Taz Turner, Chairman and CEO of CordovaCann, said the transaction is a strong step forward in progressing the company’s current business strategy.
“This American operator currently operates 20 retail stores in three US states, generating over C$60 million in annual revenue.
“The stores we plan on opening in Canada over the coming months appear very attractive given their expected revenue and cash flow generation and will help establish Cordova’s position in the global cannabis market,” he said.
Under the terms of the agreement, CordovaCann will issue a total of 18 million common shares, worth $3,060,000, to the seller as consideration. This represents an approximate 31 per cent stake in the company.
CordovaCann has also agreed to issue a further 3 million shares, worth $510,000, for every retail store which successfully opens. However, this will be capped at the issuance of 15 million shares, and each store must open before March 15, 2021, in order to be eligible.
In addition, CordovaCann will assume up to $1 million in long-term debt of the seller.
As part of the transaction, the seller will have the right to appoint two directors to CordovaCann’s board.
CordovaCann Corporation (CDVA) is currently trading steadily at $0.17 per share, as of 12:07pm EST.