Geyser Brands Inc. has signed a definitive joint venture agreement with Factory Brewing Ltd. to jointly develop, manufacture, market, and sell non-alcoholic cannabis-infused beverage brands in Canadian markets in two phases. Pursuant to the terms of the JV Agreement, the Joint Venture will be structured as a new company (the “NewCo“), with two standing committees for the purpose of collaboration and cooperation on research, development and commercialization of its products.
“Geyser Brands continues to build and lead the way in establishing its position as a health and wellness CPG company that gives lift to products with the addition of cannabis,” said Geyser Brands CEO, Andreas Thatcher, “Partnering with Craft Collective and jointly leveraging our unique areas of expertise will allow both parties to enter this emerging market and develop high-quality non cannabis and cannabis-infused beverages for the consumable cannabis market.”
Craft Collective CEO, Andrew Harris stated, “This joint venture between Craft Collective and Geyser Brands marks an exciting milestone for our company as we continue to release innovative beverage brands to market. We look forward to launching impactful products through this combination of our expertise.”
The first committee will be dedicated to identifying, developing and testing formulations for commercialization. The second committee will be dedicated to identifying and evaluating brands, including those brands owned by the Company and Craft Collective, for commercialization. Each committee will be comprised of 3 members from each of Geyser Brands and Craft Collective with the necessary expertise for each committee’s mandate, with the Company appointing the Chair of each committee. The resulting NewCo will combine the craft beverage manufacturing, marketing and distribution expertise from Craft Collective with Geyser Brands’ cannabis expertise, including leveraging its licensed producer facility, formulation expertise, and distribution channels.
Under the terms of the JV Agreement, the NewCo will immediately commence developing multiple product formulations and branding for both cannabis and non-cannabis products for introduction into the Canadian market. Craft Collective and NewCo will enter into a mutually agreeable non-cannabis product manufacturing and sales agreement in which Newco will outsource to Craft Collective the manufacturing and distribution of its non-cannabis products. Production of non-cannabis products will take place at Craft Collectives’ facility in Vancouver, British Columbia.
Upon receipt of regulatory approval for the production of cannabis products, Craft Collective and NewCo will use commercially reasonable efforts to enter into a definitive agreement (the “JV Management Agreement“) in connection with the day to day management of the NewCo by Craft Collective, on terms and conditions mutually agreeable and customary in a transaction of this nature. Subject to the terms of the JV Management Agreement, all cannabis products will be manufactured at Geyser Brands’ licensed facility in Port Coquitlam, British Columbia.
Pursuant to the terms of the JV Agreement, Geyser Brands will have a 75% interest in the NewCo, with Craft Collective’s 25% interest being reserved and issued upon completion of certain conditions outlined in the JV Agreement, including receipt of regulatory approval for the production of cannabis products, the execution of the JV Management Agreement and the execution of a mutually agreeable shareholder agreement (collectively, the “Issue Conditions“). In the event the Issue Conditions are not satisfied or waived by Geyser Brands on or before December 31, 2019, or such other date as mutually agreed by the parties, there will be no obligation for NewCo to issue any interest to Craft Collective.