Hiku Brands Company has entered into a binding letter of intent with Oceanic Releaf Inc., a Newfoundland & Labrador-based late-stage applicant under the Access to Cannabis for Medical Purposes Regulations. Under the terms of the letter, Hiku will invest up to $1,000,000 in cash and up to $2,000,000 worth of common shares of Hiku in exchange for 25% of the post-closing aggregate issued and outstanding shares of Oceanic on a fully-diluted basis.
In connection with the Strategic Investment and pursuant to the LOI, Hiku and Oceanic intend to become licensed for up to five cannabis retail locations within the province, and will enter into a retail agreement governing the operation of these stores. The Strategic Investment will be contingent upon securing retail licenses from the Government of Newfoundland & Labrador allowing Hiku to operate stores within Newfoundland & Labrador.
“We are excited to be a cornerstone investor in Oceanic, a true pioneer in the Newfoundland & Labrador cannabis industry. Taylor Giovannini and her team’s entrepreneurial operating and partnership philosophy aligns perfectly with Hiku’s,” said Alan Gertner, CEO of Hiku. “This expansion to the East Coast marks a critical milestone for us, and we are thrilled to be able to bring our first-class retail experience across Canada.”
Oceanic is focused on retrofitting 15,000 square feet within an existing 63,000 square-foot facility in the heart of the Burin Peninsula, and is dedicated to supporting local employment, infrastructure and innovation. Proceeds from the Strategic Investment will be used towards the completion of the Phase 1 retrofit, with a cultivation licence anticipated to be received by the end of the year.
Hiku and Oceanic intend to work collaboratively with the Government of Newfoundland & Labrador to secure an agreement (the “Government Agreement”), which is anticipated to include the licensing of up to five cannabis retail locations throughout the province with a farm gate store at the Oceanic Burin Facility.