TORONTO, Nov. 28, 2018 /CNW/ - Newstrike Brands
Ltd. (TSX-V:HIP) ("Newstrike" or the "Company")
is pleased to announce that it has entered into an agreement, as of
today's date, with Peter Neal and
Chris Neal and their company, Neal
Brothers Inc. ("Neal Brothers") to create a co-branded
specialty food products company (the "Joint Venture
Agreement") to develop, market and sell cannabis
edibles.
"We are bringing together two established
brands and combining our respective strengths in a venture focused
on the cannabis edibles sector. The Neal Brothers are
innovators with a proven track record of creating a premium brand
of products. Through their distribution business, they have also
discovered and built several premium brands in the Canadian retail
marketplace. We will apply our combined expertise to
deliver leading-edge edible cannabis products that will both
delight consumers and create shareholder value," said Jay Wilgar, CEO of Newstrike. "Our goal is to
become the most trusted consumer focused brand in the Cannabis
sector. Through our joint venture with Neal Brothers, we will
engage in vast consumer insights, as well as in-house R&D to
create real products that will stand the test of time in the
consumer packaged goods (CPG) space."
"We are thrilled to partner with Newstrike," said
Peter Neal. "Bringing together our
combined brand and product development capabilities under one roof,
coupled with our respective experience in the cannabis and food
sectors, creates a powerful combination. Our goal is to continue to
develop high quality products based on consumer desires and we see
tremendous opportunity to come up with innovative and exciting
products. We are approaching this product segment with an open mind
and can't wait to start developing premium edible cannabis products
and to share our creations with customers in the very near
future."
The joint venture partners will conceive and develop
innovative edible cannabis products at Newstrike's fully-licensed
Niagara operations, where an in-house research and development
facility is being constructed. Product development and future
product brand names will be based on consumer data and
insights.
Terms of Agreement
Pursuant to the Joint Venture Agreement, Newstrike and
Neal Brothers have incorporated a joint venture entity and have
agreed on terms relating to the management and control of the
specialty food products company (the "Joint Venture"). The
Company and Neal Brothers will contribute proportional capital in
the Joint Venture in exchange for a 60% and a 40% interest in the
Joint Venture, respectively. The Joint Venture will be
involved in the procuring, manufacturing, distributing, marketing
and selling of certain co-branded specialty food products which
will be infused, derived or otherwise include cannabis.
Additional Investment
The Company has also entered into an agreement to acquire
a minority interest in Neal Brothers, pursuant to a share purchase
agreement (the "SPA" and, together with the Joint Venture
Agreement, the "Agreements"). As part of the agreement,
Peter and Chris Neal will also
provide advisory services to Newstrike with respect to the business
of Newstrike.
"The culture, style and ethos of the Neal Brothers company
is something we genuinely want to be part of," said Wilgar. "We
felt an investment into their business was an important step that
signifies the start of a long-lasting partnership between our two
companies."
Approvals
The Agreements are subject to customary conditions
precedent, including receipt of all applicable regulatory and
third-party approvals.
Other Matters
In connection with new executive appointments, the Company
has granted incentive stock options to purchase up to an aggregate
of 1,500,000 common shares of the Company (the "Options"). The
Options are exercisable for a period of 3 years at a price of
$0.52 per share, based on the 15-day
volume weighted average price plus 10% of Newstrike's common shares
on the TSX Venture Exchange as of November
25, 2018. All Options were granted in accordance of the
Company's stock option plan.
About Newstrike and Up Cannabis
Newstrike is the parent company of Up Cannabis Inc., a
licensed producer of cannabis that is licensed to both cultivate
and sell cannabis in all acceptable forms. Newstrike, through Up
Cannabis and together with select strategic partners,
including Canada's iconic musicians The Tragically Hip,
is developing a diverse network of high-quality cannabis brands.
For more information,
visit http://www.up.ca or http://www.newstrike.ca
About Neal Brothers Inc.
Neal Brothers is a highly respected leader and innovator
in the natural, organic and specialty foods sector in Canada. Started by brothers Chris and Peter Neal in their Mom's kitchen in
Aurora, Ontario in 1988, Neal
Brothers branded products have been available across Canada for over 30 years. For more
information, visit
www.nealbrothersfoods.com
Forward-Looking Information
This news release contains forward-looking statements.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of Newstrike to be materially different
from any future results, performance or achievements expressed or
implied by the forward-looking statements. Often, but not always,
forward-looking statements can be identified by the use of words
such as "plans", "expects" or "does not expect", "is expected",
"estimates", "intends", "anticipates" or "does not anticipate", or
"believes", or variations of such words and phrases or state that
certain actions, events or results "may", "could", "would", "might"
or "will" be taken, occur or be achieved. These forward-looking
statements include, but are not limited to, statements relating to
the entering into of the Agreements and the completion of the
proposed transactions thereunder by and between the Company and
Neal Brothers. Accordingly, readers should not place undue reliance
on the forward-looking statements and information contained in this
press release. Since forward-looking statements and information
address future events and conditions, by their very nature they
involve inherent risks and uncertainties.
Actual results could differ materially from those
currently anticipated due to a number of factors and risks. Readers
are cautioned that the foregoing list of factors is not exhaustive.
The forward-looking statements contained in this news release are
made as of the date of this release and, accordingly, are subject
to change after such date.
Newstrike does not assume any obligation to update or
revise any forward-looking statements, whether written or oral,
that may be made from time to time by us or on our behalf, except
as required by applicable law.
Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE Newstrike Brands Ltd.