Public markets often show benefits of association in the cannabis industry — particularly when the sector crosses paths with a market one might expect — which seems to be the case after a new partnership was unveiled between a specialty coffee manufacturer and an operator of marijuana care centers in Canada.
On Thursday (April 12) National Access Cannabis (TSXV:NAC) revealed a strategic association with The Second Cup (TSX:SCU), a retailer of specialty coffee that operates franchise cafes of its brand, to create an entirely new network of recreational cannabis dispensaries in Western Canada.
The two companies announced there could be an expansion of these new dispensaries to additional provinces in Canada as the laws advance regarding the sale of cannabis.
National Access Cannabis indicated it plans to apply for licenses to dispense cannabis products and — if the company obtains said licenses — will “leverage Second Cup’s extensive Canadian retail footprint to construct retail stores carrying leading cannabis products.”
Shares of both companies make significant gains
This new partnership proved to entice the investor market as both companies enjoyed a high volume of trading and a significant increase in share prices.
Second Cup’s gamble to enter the cannabis space with this deal has proven worthwhile based on early returns. After the markets closed on Thursday shares of SCU increased 28.73 amounting to a C$0.79 gain per share for investors.
At one point of trading, Second Cup’s shares reached C$3.74, its highest price per share of the year so far. The previous close for the company was C$2.75.
National Access Cannabis enjoyed a more moderate growth to its stock based on Thursday’s announcement. The company’s shares on the TSX Venture exchange increased 9.89 percent in value.
By the times the open markets closed National Access Cannabis’ shares were valued at C$1.
Second Cup’s real estate appears to have played a key part in the decision to execute this new partnership, according to Mark Goliger, CEO of National Access Cannabis.
This relationship allows us to quickly expand our footprint in proven high-traffic retail locations across Canada,” Goliger said.
As part of the agreement, National Access Cannabis issued a set of warrants to Second Cup for the option to purchase 5,000,000 of its own common shares. The company said these warrants hold an exercise price of C$0.91 per common share and will last until the year 2023.
“This strategic relationship provides Second Cup with a great opportunity to leverage our select real estate assets to increase value for shareholders and franchisee partners,” Garry Macdonald, Second Cup’s President, and CEO.
National Access Cannabis’ busy year so far
The company made a splash in the industry on February when it obtained one of the four coveted retail licenses in the province of Manitoba and has become a key option for a variety of cannabis partners, including CannaRoyalty (CSE:CRZ,OTCQX:CNNRF), Cannabis Wheaton (TSXV:CBW) and private marijuana producer Tilray.
Winning these licenses means National Access Cannabis will be allowed to build, develop and operate cannabis stores in approved municipalities. However, the number of locations the company is allowed to construct will be evaluated with the province.
In March CannaRoyalty revealed deals in place to bring its brands and products to Canada if the regulations ever allow it to be. CannaRoyalty plans to bring those products to the National Access Cannabis stores, as permitted by the laws.
CannaRoyalty acts as an operator focused on the US cannabis market and therefore has not obtained a licensed producer (LP) or applied itself for a license. Afzal Hasan, executive vice president for corporate development with CannaRoyalty, told INN this deal is meant as a preemptive measure.
“[CannaRoyalty’s] deep experience successfully supplying branded cannabis products to the Californian marketplace will serve us well as we look to grow our retail footprint outside of Manitoba, to Alberta, British Columbia and beyond,” Goliger said in a statement.
Hasan previously told INN that CannaRoyalty wanted to secure distribution channels before announcing any introduction of their products to the Canadian market, given the fact he’s unsure if it will ever be allowed for them to do so.
National Access Cannabis has been able to pique the interest of the market with significant deals on paper. The key for them will be to capitalize on these partnerships if they are allowed to develop.
Don’t forget to follow us @INN_Cannabis for real-time news updates!
Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
American cannabis sales hit US$17.5 billion in 2020, a research group’s new study shows.
Meanwhile, a Canadian cannabis producer began offering CBD beverages in the US, another move that shows how interested Canadians are in the overall US cannabis market at the moment.
Some pretty important news out of health and wellness; beverage and natural products company BevCanna Enterprises Inc. (CSE:BEV, Q:BVNNF, FSE:7BC) this week. For those of you following the Company with us, stay tuned.
As investors continue to prioritize cannabis opportunities in the US, market watchers expect mergers and acquisitions (M&A) to play a role in the future for Canadian companies.
A consolidation trend has been expected in the Canadian cannabis space for some time now based on the size of the market compared to the number of operations in the country.
BioHarvest Sciences Inc. Unveils the Unique Polyphenolic Content of Its Upcoming Olive-Based Nutraceutical
The product will include polyphenols known to have significant health benefits.
BioHarvest Sciences Inc. (CSE: BHSC) (“BioHarvest” or the “Company”) has reached an important milestone in its development program of additional Nutraceuticals. The olive-based Nutraceutical product scheduled for market availability in the second half of 2022 will contain the following unique matrix of polyphenols: hydroxytyrosol, trosol, and verbascoside. These compounds are the major polyphenols in naturally grown olives and are responsible for the high antioxidant activity of olives and olive oil. Importantly, the BioHarvest olive-based Nutraceutical product will provide all the benefits of olives and olive oil with a low calorie count per serving.
Cresco Labs (CSE:CL) (OTCQX:CRLBF) (“Cresco” or the “Company”), one of the largest vertically integrated multistate cannabis operators in the United States, announced today that it will report financial results for the fourth quarter and full year ended December 31 st , 2020 on Thursday March 25 th , 2021 before the market opens.
The Company will host a conference call and webcast to discuss its financial results and provide investors with key business highlights on Thursday March 25 th , 2021 at 8:30am Eastern Time (7:30am Central Time).