Canadian cannabis company Newstrike Brands has entered an agreement with speciality food company Neal Brothers to create a co-branded speciality food products company to develop, market and sell cannabis edibles.
The joint venture (JV) company will be engaged in manufacturing of certain co-branded speciality food products which will be infused with cannabis.
Edible cannabis products will be developed at Newstrike’s licensed Niagara operations, where an in-house research and development facility is currently being built.
Newstrike CEO Jay Wilgar said: “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 research and development to create real products that will stand the test of time in the consumer packaged goods (CPG) space.”
Neal Brothers co-founder Peter Neal said: “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.”
Newstrike Brands will own 60% stake in the JV company, while the remaining stake will be held by Neal Brothers.
Newstrike Brands has also agreed to acquire a minority stake in Neal Brothers, following a share purchase agreement (SPA).
The agreements are subject to customary conditions, including regulatory and third-party approvals.
In June, Canada voted to legalise the use of cannabis with the Senate’s passing of Bill C-45, the Cannabis Act. With this legislation, Canada the second country after Uruguay to legalise the use of the drug.
