Inner Spirit Holdings Announces System-Wide Retail Sales for Spiritleaf Retail Cannabis Stores Exceeded $29 Million in 2019

Published: January 13, 2020

Inner Spirit Holdings Announces System-Wide Retail Sales for Spiritleaf Retail Cannabis Stores Exceeded $29 Million in 2019

Inner Spirit Holdings Ltd., a Canadian company establishing a national network of retail cannabis stores under its Spiritleaf brand, announced that it achieved more than $29 million in system-wide retail sales1 and served approximately 740,000 customers in 2019.  With 43 stores operating to start 2020 and with additional locations set to open, the Company is well poised for future sales and revenue growth as a leading Canadian retailer in the recreational cannabis industry.

In addition to the previously planned nine additional franchise locations which the Company anticipates opening in Alberta and British Columbia in 2020, Inner Spirit will also be pursuing expansion in other provinces. With the Ontario and Saskatchewan governments announcing late in 2019 that they are moving to an open licensing system, the Company intends to apply for additional retail operator licenses in those provinces at the time applications are able to be submitted. Within the recent Alcohol and Gaming Commission of Ontario (the “AGCO“) announcement that Ontario will be making changes to the allocation of cannabis retail licensing was a modification that will enable Licensed Producers (“LPs“) to own or control up to 25% of a corporation holding a cannabis Retail Operator Licence (an increase from 9.9%).

Inner Spirit has been well supported by its strategic LP partners including Auxly Cannabis Group Inc., HEXO Corp. and Tilray, Inc. With current LP ownership sitting just above 25%, the Company is working to adjust that percentage below 25% as well as raise additional capital to support opening corporate-owned retail cannabis stores in Ontario and Saskatchewan, if and when doing so is permitted under applicable laws and regulations. As an initial step, Inner Spirit has closed a private placement offering (the “Offering“) for gross proceeds of $1,085,454, issuing 10,854,542 common shares of the Company to a prestigious UK-based independent private equity firm. The common shares of the Company issued under the Offering are subject to a four month hold period in accordance with applicable securities laws.

“The recent opportunities that presented in Ontario and Saskatchewan represent significant growth potential for our Company. Although for some time we had been planning to open additional licensed and franchised locations in Ontario, we may now be able to add corporate-owned stores throughout the province and open up to 30 total Spiritleaf locations in the country’s largest market by the end of 2020. We anticipate expansion into new markets will have a positive impact on long-term revenues,” said Darren Bondar, President and CEO of Inner Spirit.

The Company also detailed several corporate activities that are driving Spiritleaf’s business strategy forward at this time.

  • The effective execution and roll-out of Cannabis 2.0 products across the retail store network.
  • The launch of the Spiritleaf Collective members’ program, initially available only in Alberta, which has enrolled more than 14,700 customers in just the first few weeks.
  • Ongoing attention to its in-store and overall customer experience as Spiritleaf stores enjoy an average-weighted Google ranking of 4.4 out of 5 stars2.
  • The submission of 15 Retail Operator Licences representing 20 potential retail store locations in Ontario (pending all regulatory and operating approvals) in response to AGCO opening up the application process for cannabis retail licensing in the province as of January 6, 2020.

“We made great progress on our business strategy in 2019 as the Spiritleaf team opened stores across the country to serve local communities in jurisdictions where permissible. We expect the coming year will be just as eventful for us as we continue to open stores and enter new markets. We have developed Spiritleaf to be a leading cannabis retail brand and expect the open licensing systems in Ontario and Saskatchewan will be a significant catalyst for us and for the Canadian cannabis industry as a whole. I look forward to ongoing support and commitment from our investors, franchise partners, employees, partners and customers,” said Bondar.

The Spiritleaf retail cannabis store network includes 43 franchised, licensed and corporate-owned stores in AlbertaBritish ColumbiaSaskatchewan and Ontario. The most recent addition was a franchised Spiritleaf store in West Kelowna, British Columbia which opened on December 28, 2019. Please visit www.spiritleaf.ca for further information on store locations and operating hours.

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