Seattle-based beverage company Jones Soda Co. (OTCQB: JSDA) is entering the cannabis sector through an agreement with a Canadian reporting issuer.
Known for unconventional flavours and customer-designed bottle artwork, Jones introduced its plans to dive into the weed market in the summer and released details of a deal on Wednesday.
The firm explains in a statement that it has struck a definitive acquisition agreement with reporting issuer Pinestar Gold Inc., based in Vancouver, British Columbia. Jones will acquire all of the issued and outstanding shares of Pinestar for Jones shares at a one-to-one ratio.
By entering into the agreement with Pinestar, Jones has taken a significant step towards the development of cannabis-infused beverages and edibles line, president and CEO Mark Murray said in a statement.
“We are excited about the opportunity to work with certain large shareholders of Pinestar, and we are confident that they will provide Jones with the resources and expertise necessary to help the company successfully completed its planned expansion into the cannabis sector.”
The deal will be carried out through a court-approved plan and is subject to several conditions, including approval by Pinestar’s shareholders; the surrender of the 700,000 post-consolidation Pinestar warrants; and the receipt of all necessary regulatory and court approvals along with other closing conditions typical of this type of deal.
According to Jones, it’s expected that shareholders’ approval will come during a special meeting in December, and if all other conditions are met, the arrangement would close “shortly thereafter.”
Jones and Pinestar’s board of directors unanimously agreed to the deal.
In July, Jones issued a US$2-million convertible debenture for the development of cannabis and CBD product lines.
At the time, Murray said, “Cannabis-infused beverages and edibles are a perfect fit for the iconic personality of the Jones brand.”
Company stock went down 1.58 per cent Wednesday to US$0.94 on the OTCQB.