Franchise Cannabis will make a $500,000 investment in Mota, while Mota will buy a 50% interest in the European JV for $360,000
Corp () (OTCPINK:PEMTF) (FSE:1WZ1) said Wednesday that it has struck a binding agreement with Franchise Cannabis Corp to form a joint venture in Europe to market Franchise-manufactured CBD, hemp and cosmetic products in the European Union, UK, Switzerland, and Norway.
The Vancouver-based eCommerce-focused company said the custom manufactured products would be sold online utilizing its eCommerce infrastructure.
Franchise is a leading Europe-focused cannabis and pharmaceutical distribution company based in Germany with two good distribution practices certified facilities, exporting to over 18 countries. It also currently serves a network of over 1,500 pharmacies in Germany with medical cannabis.
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"We are very excited to expand our eCommerce opportunities in Europe, as this has long been one of our strategic goals. Having a strong partner like Franchise to ensure consumers are provided with quality products is critical to success in the European market,” CEO Ryan Hoggan said in a statement.
“Franchise is well positioned in Europe and has an established operating history in the cannabis industry. We believe this strategic joint venture will accelerate the expansion of our health and wellness platform in Europe," he added.
As a follow up to the agreement, Franchise will make a $500,000 equity investment in the company through a private placement subscription of $0.28 per unit. Each unit will consist of one Mota share and one share purchase warrant, with each warrant entitling the holder to purchase an additional share at a price of $0.38 per warrant for a period of 24 months from their date of issue.
Mota will then make a $360,000 equity investment into the European JV, providing the initial funds to launch the Franchise products in Europe using the company's eCommerce expertise.
Both the companies will have a 50/50 ownership interest in the European JV. Franchise will manage procurement and fulfillment of customer orders from its European facilities, while Mota provides the marketing and eCommerce operations infrastructure.
The establishment of the European JV is contingent on Franchise making the $500,000 investment in Mota, and Mota buying a 50% interest in the European JV for $360,000.
"Ryan and his team are extremely smart and hard-working. They are unbelievable at launching new product lines into the market, and given our European presence and market knowledge, the Franchise and Mota Venture teams complement one another well,” stated Franchise CEO Clifford Starke.
“I have been a director and strategic shareholder of another eCommerce focused cannabis business that reached a billion-dollar market capitalization and I can attest that the Mota team is at a whole different level."
Mota is an established natural health products and eCommerce technology company focusing on the CBD and psychedelic medicine sectors. The company has a strong presence in both North America and Europe.
Contact the author Uttara Choudhury at [email protected]
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