CEO Gary Latham says the partnership represents an ‘important part’ of Mojave Jane's strategy in California as it looks to expand into new markets
Mojave Jane Brands Inc () (OTC:HHPHF) announced Tuesday that it has an immediate 21% interest, with the right to increase its stake to 40% in California’s 2083 Group, which owns several consumer-facing cannabis companies.
Through the acquisition of shares in the 2083 Group, Mojave Jane continues on its path, with a focus on the Golden State.
Though the cannabis company is based in Toronto, it has a vertically integrated presence in California, including the Caligold brand of cannabis-infused chocolate. Mohave Jane’s US holdings are comprised of assets that include cultivation to scale, branding, packaging, manufacturing and processing.
READ: Mojave Jane casts eyes on California cannabis market with a new name and ticker
Mojave Jane said it has acquired 20.7% of the shares of the 2083 Group, with “an opportunity” to acquire up to 40% of the outstanding shares, provided the 2083 Group meets some predetermined performance milestones linked to expanding its consumer reach.
In a sign of the growing partnership, 2083 Group CEO AJ Gentile was elected as a director to Mojave Jane's board at its recent annual general meeting.
2083 Group is an innovator in California's cannabis market, best known for its Speedweed on-demand home-delivery platform
Strategic partnership
In addition to Mojave Jane acquiring an interest in the 2083 Group, the parties have also established a strategic partnership that includes:
• Access to consumer purchase and market data that will provide a unique understanding of consumer demands and buying habits through Speedweed's growing database of purchases made in the California market
• Development of Mojave Jane products and brands to match consumer preferences in real time
• Delivery of those products right to the consumer via the Speedweed delivery platform
• Advancing Mojave Jane's goal to own an integrated supply chain
California strategy
"Our partnership with 2083 represents an important part of Mojave Jane's strategy in California and as we are looking to expand into new markets across the state,” said Mojave Jane CEO Gary Latham. “Closing this investment means that we can begin to realize the benefits of all of 2083 Group's assets, including direct-to-consumer-delivery, rapid introduction of Mojave Jane brands and products to an existing and growing consumer base, and a host of promotional capabilities.”
Latham noted that gaining access to delivery is “the final piece” in owning the entire cannabis supply chain.
“We are now very well positioned for generating revenue and creating value for our investors,” said Latham.
The financials
Mojave Jane had advanced a secured loan to the 2083 Group for US$500,000. The loan bore 7% annual interest and was payable within 12 months. According to the agreement, the loan has been converted into 10.2% of the outstanding 2083 shares.
Meanwhile, Mojave Jane acquired an additional 10.5% of the issued and outstanding 2083 Shares for an aggregate price of US$520,000.
The agreement underscores that Mojave Jane has an option to acquire additional shares to increase its interest in the 2083 Group from 20.7% to 40% for an additional US$1,580,000.
Expanding SpeedWeed's delivery platform
"Two words: game changer. That's what our partnership with Mojave Jane is. It provides us with the capital we need to continue the expansion of SpeedWeed's on-demand home-delivery platform in California with leading brands and retailers," said 2083 Group CEO AJ Gentile. "With a database of over 250,000 customers and growing, we see consumer trends as they happen. What's exciting is the ability to marry our data with Mojave Jane's manufacturing and distribution capabilities. Now, we can bring to market the products our customers want — in near real-time. A true game changer."
—(Updates with quotes from 2083 Group CEO AJ Gentile)—
Contact Uttara Choudhury at [email protected]
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