Canndara Acquisition Makes Westleaf One of Canada’s Largest Premium Cannabis Retailers

Calgary-based Westleaf Inc. (TSX-V: WL) announced on January 24th it has acquired 100% of Canndara Canada Inc. through a deal expected to close at the end of January or early February, which will give Westleaf one of the largest premium retail footprints in Canada.

Over 50 Premium Retail Spaces

In December Westleaf acquired a 21.4% stake in Canndara and the option to purchase the company outright within 75 days.  Canndara currently controls over fifty premium retail locations throughout Western Canada and Ontario at varying stages of development, with seventeen development permits already awarded. All locations are expected to be operational by the end of 2020, subject to provincial and municipal licensing and regulations.

Canndara’s founders will join Westleaf’s senior management team, bringing with them over 50 years of combined experience in retail, healthcare, hospitality and investment. John Radostits built up the largest franchisee group under the Sobey’s banner, and Ray Yue was responsible for the strategic growth of Canadian pharmacies and private and public health care centres. Both are residents of Edmonton and have been awarded regional and national business and leadership awards and accolades.

About the deal, Scott Hurd, President and CEO of Westleaf said, “Since the announcement of our original investment we continue to be impressed with the progress of the development of the Canndara retail portfolio and how well it complements the Westleaf Prairie Records retail locations. This acquisition will position Westleaf to become one of the largest premium cannabis retailers in Western Canada. Cannabis retail is the cornerstone of our vertically integrated strategy as the unique Prairie Records concept enables Westleaf to engage with consumers and build brand equity and loyalty for its stores and produced product brands.”

Unique Branding Experience

Westleaf is developing a national footprint of retail stores called Prairie Records, which mimic the design and feel of record stores to inject some much-needed flavour into the increasingly homogeneous Canadian cannabis retail industry.

Prairie Records’ racks will contain covers resembling album covers, with information about product names, branding, strains, and THC/CBD content. The concept leverages the instinctual connection between music and recreational cannabis, allows Prairie Records to operate and excel within the strict regulation of product packaging and merchandising, and allows customers to more deeply connect with chosen brands while also becoming educated about cannabis.

The Canndara portfolio complements Westleaf’s existing cannabis real estate portfolio and reinforces Westleaf’s strategy of focusing only on tier-1 locations, including the only approved development permits adjacent to the University of Alberta and retail spaces currently under development in Calgary and Banff, including a flagship Prairie Records store in Calgary’s iconic Palace Theatre.

True Vertical Integration

Westleaf is one of the few vertically integrated cannabis companies in the Canada, with assets owned and under development across each vertical of the business, including cultivation, extraction, processing and manufacturing, distribution and wholly-owned retail. Westleaf believes that being vertically integrated provides significant optionality and positions the company to protect margins across the life cycle of the industry. The company is currently building two state-of-the-art manufacturing facilities; a 115 hundred sq.-ft. indoor cultivation facility in Battleford, Saskatchewan and a 60,000 sq.-ft. Indoor production facility in Calgary. Once completed, the facilities will provide branded products for distribution through Westleaf’s Prairie Records retail outlets.

The cannabis market is highly fragmented and Westleaf continues to actively evaluate additional accretive merger and acquisition opportunities. Last year alone, the company successfully inked strategic partnerships with Tilray, VIVO Cannabis, and Delta 9 Cannabis, secured favourable debt financing with ATB Financial, and crafted a partnership with Thunderchild First Nation of Saskatchewan.

The year ahead should be an exciting one for Westleaf, and it’s definitely one company you’ll want to keep an eye on.

For more information, please visit www.westleaf.com or www.prairierecords.ca.

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About Tony Deyes