Auxly Cannabis Group Inc. (TSXV: XLY) and Atlantic Cultivation Inc. announced today that they entered a strategic partnership to collaborate on the development of a 110,000 square foot indoor growth facility in St. Johns, Newfoundland and Labrador. The move is a bid on the part of Auxly to expand their presence in Eastern Canada and will correspond with the development of five retail locations in the provinces.
According to the agreement, Auxly will invest over $2,500,000 into Atlantic in exchange for an equity stake in the company along with a long-term right to order up to 30% of dried cannabis produced at the new facility.
Auxly also will be providing financial, regulatory, and infrastructural support as Atlantic Cultivation works to obtain its license under the Cannabis Act and open retail locations in the province.
“We are excited to have entered into this partnership with Atlantic Cultivation, a company led by an excellent management team with deep roots in Newfoundland and Labrador. This strategic partnership adds significant depth to our operations in Atlantic Canada,” said President and Director of Auxly, Hugo Alves. “This partnership with Atlantic, coupled with our premium craft producer Robinson’s cannabis in Nova Scotia and our world-class innovation and extraction hub at Dosecann in PEI demonstrates Auxly’s commitment to Atlantic Canada where we are building meaningful cannabis businesses that have a positive impact on the region.”
In addition to the agreement, founding shareholders of Atlantic Cultivation will contribute an extra $2,500,000 in funding to help the development of these new retail locations. The combined entity will work in tandem with the Newfoundland and Labrador provincial government to obtain all the regulatory approvals needed to open the five planned dispensaries. While the federal government of Canada legalized recreational marijuana last Wednesday, it’s up to the provincial governments to take responsibility for managing regulatory licenses along with collecting taxes of cannabis-related sales.
Christopher Crosbie, Atlantic Cultivation’s CEO, commented that “The Atlantic Cultivation team and I are thrilled to collaborate with Auxly on this project at home. Atlantic and Auxly’s partnership was facilitated through a mutual passion and dedication to creating value in the cannabis industry and a commitment to investment in Atlantic Canada – in particular, Newfoundland and Labrador.”
In the coming future, the cannabis market is expected to see a slew of mergers, acquisitions, and strategic partnerships as the young industry consolidates.
Auxly Cannabis Group Inc. Company Profile
Auxly Cannabis Group is a collective of entrepreneurs with a passion for the cannabis industry past, present and future. Our mandate is to facilitate growth for our partners by providing them with financial support and sharing our collective industry experience. Our partners all have different visions, voices and brand values, and all share a common goal—to build a world-class industry based on ethics, diversity, quality and innovation. – Yahoo Finance
Atlantic Cultivation Company Profile
Atlantic Cultivation was founded by a team of experienced Newfoundland and Labrador entrepreneurs committed to producing quality craft cannabis on a commercial scale. As a vertically integrated company, we will utilize industry leading hydroponic technology to produce premium cannabis products made available in our own retail stores, with the intention of expanding to other markets. We enter this industry with Newfoundland and Labrador in mind and every decision will be made with an awareness of the impacts on its people. We strive to create meaningful employment for the people of Newfoundland and Labrador with a focus on gender equality, inclusiveness and diversity. – Atlantic Cultivation