Emerging leader in cannabis-infused beverages, BevCanna Enterprises Inc. (CSE:BEV, Q:BVNNF, FSE:7BC) (“BevCanna” or the “Company”) announced today it has signed an agreement with Maritime-based licensed cannabis producer Argentia Gold Corp. (“Argentia”) to exclusively represent BevCanna’s line of cannabis-infused beverages in Newfoundland, PEI and New Brunswick. The two companies have entered a non-binding letter of intent (the “LOI”) for Argentia to distribute and sell BevCanna products across the three provinces, with the intent of signing a definitive agreement (the “Agreement”) within the next 45 days.
With consumption rates for cannabis among the highest in Canada (25.9 per cent for Newfoundland and 20.9 per cent for PEI), the Atlantic provinces represent an attractive market for cannabis-infused product producers like BevCanna. The market for cannabis is anticipated to expand to $56M annually in New Brunswick by 2025, $49M in Newfoundland and $21M per year in PEI. BevCanna chose Argentia Gold for their strong knowledge of the Atlantic cannabis markets and their sales strategy for the nearly 50 Licensed Retailers across the three provinces. Engaging an experienced partner in the region will also allow BevCanna to focus on other significant Canadian markets, while building exposure and revenue in the Atlantic provinces.
“Argentia is the ideal partner for us in the burgeoning Atlantic market,” said John Campbell, Chief Strategic Officer for BevCanna. “They have an unparalleled knowledge of the regional cannabis landscape and a detailed understanding of the distribution network. They also have excellent relationships with the provincial bodies in these provinces, which will assist us as we focus on building our presence in the region.”
“We’re excited to bring BevCanna’s innovative and diverse cannabis-infused beverage portfolio to the Atlantic region,” commented Dave Thomson, Head of Business Development for Argentia Gold. “We are laser focused on bringing the same high-quality, in-demand products that are being sold in the larger Canadian markets to the Atlantic provinces, and we expect BevCanna’s upcoming line of beverages to be extremely popular with consumers.”
Terms of the Agreement
- BevCanna and Argentia intend to enter into an exclusive distribution agreement, to distribute and sell BevCanna products in the provinces of Newfoundland, PEI, and New Brunswick
- BevCanna will provide finished cannabis and/or cannabis extract products
- Argentia will provide supply chain, distribution, and sales infrastructure and services in the specified provinces
- In consideration for such infrastructure and services provided by Argentia, Bevcanna will pay a service fee of 15 per cent, with up to an additional 5 per cent bonus to be paid based upon the achievement of mutually agreed sales milestones
- Additional commercial terms will be outlined in the Agreement
- Entry into the Agreement is subject to satisfactory completion of, among other things:
- Due diligence investigations by each partner;
- Negotiation of the Agreement; and
- Approval by each partner’s board of directors.
