SpeakEasy Cannabis Club Ltd. (CSE: EASY) (Frankfurt: 39H) (the “Company” or “SpeakEasy“) a holder of a federal licence to cultivate, process and sell cannabis under the Cannabis Act, is pleased to announce that it has completed its product menu for two of its concentrate brands scheduled for release over the next two quarters. In addition, further to its press releases of January 21, 2021 and April 9, 2021, the Company has completed the transactions contemplated by a convertible loan agreement (the “Loan Agreement“) among the Company, 10161233 Canada Limited, 1287866 B.C. Ltd. (the “Lender“) and Bhayana Ventures Ltd. (the “Administrative Agent“) dated April 9, 2021, for aggregate gross proceeds of CDN$3,000,000 (the “Loan“).
SpeakEasy has created a complete line of products formulated from its fresh frozen and dried cannabis material that will be launched under two separate brands scheduled to be introduced over the next two quarters. We have studied the markets in Canada and in the US, noting that certain market trends are favorable and therefore we have created products based on both existing products in high demand and others that are not yet in this country. Formulating these products has been a multi-year project involving genetics, outdoor cultivation, acquisition and development of intellectual property in addition to the acquisition of equipment that can produce the desired products. The advantage of having low-cost input material gives SpeakEasy the ability to enter markets focusing on the lowest priced competitor as an entry price point.
The Importance of Brands
Management believes that branding makes the cannabis industry more legitimate in the eyes of the consumer which, in turn, drives brand recognition. As the cannabis industry grows, and new differentiating entrants come into the market, the sure-way to survive is by building a unique brand experience within a particular niche. We feel SpeakEasy’s history and overall philosophy gives us a unique connection to consumers by telling a story through our brands which will be an important part of creating customer loyalty and brand recognition.
Founder Marc Geen, Canopy Growth’s recent acquisition of Supreme Cannabis for $435 million is a clear indication in the value of brand equity. From day one, we have invested a huge amount of time in building brands for our future. We believe we’re in a unique position to create quality products at low-cost while being immersed in our culture. Authenticity is the biggest factor to building real brands that customers want to engage with. It’s not a brand until your audience is willing to wear your logo because of the values you represent. It’s exciting times over here.”
Extract Product Portfolio
SpeakEasy has created and tested a menu of over 25 unique products that are now ready for launch. Once we receive our amended sales licence, expected within the next 45 days, we will be able to introduce brands and products to the market. We have established production, processing and packaging methods and anticipate entering into contracts with multiple provinces once we are granted our amended sales licence. Many of the products that we are developing are not yet available to the Canadian market however once they are launched, we expect they will be priced aggressively with a view to capturing additional market share.
Convertible Loan Financing of CDN$3.0 Million
The Company has completed the transactions Loan Agreement for aggregate gross proceeds of CDN$3,000,000.
In accordance with the terms and conditions of the Loan Agreement, the Company has issued the Administrative Agent an aggregate of 288,462 common shares in the capital of the Company (the “Common Shares“), at a deemed price of $0.52 per share, in satisfaction of the payment of a finder’s fee. In addition, the Company has granted the Administrative Agent an aggregate of 5,769,231 Common Share purchase warrants (the “Warrants“). Each Warrant entitles the holder to purchase a Common Share at a purchase price of $0.70 per Common Share, subject to adjustment, until April 21, 2024.
The principal amount of the Loan and any accrued but unpaid interest thereon will be convertible into Common Shares at the option of the Administrative Agent (on behalf of the Lender) at a price of $0.52 per Common Share, subject to adjustment, in accordance with the terms and conditions set forth in the Loan Agreement.
The Company also announces the grant of an incentive stock option to purchase up to 200,000 common shares (the “Options“) to a consultant of the Company, such Option to be granted in accordance with applicable laws and the policies of the Canadian Securities Exchange.
Shares for Debt
The Company also announces that it intends to issue an aggregate of 18,657 Common Shares in settlement of bona fide debt owing to an arm’s length creditor in the amount of $12,500. The Common Shares will be issued at a deemed price of $0.67 per share.
Proposed Board Member
In connection with the Company’s annual general meeting of shareholders scheduled to occur on April 28, 2021, management of the Company understands that a nomination from the floor will be made for the election of Ryan Kennedy as an additional independent director of the Company. The election of Mr. Kennedy would be contingent upon his receipt of security clearance by Health Canada. The nomination of Mr. Kennedy is supported by management and the Company recommends that shareholders vote in favour of the contingent election of Mr. Kennedy as a director of the Company.
Mr. Kennedy resides in Penticton, British Columbia, where he has been the President of WestRep Solutions, a manufacturer’s representative agency since April 2000. Mr. Kennedy currently holds, or exercises control over, 716,425 Common Shares.
Mr. Kennedy is a well-respected entrepreneur with a depth of experience in strategic planning and management. He brings more than 28 years’ experience in creating start ups, strategic planning, selling and marketing products, and building business relationships.
Malcolm Davidson, CEO states, “We are looking forward to working with Ryan and harvesting some of the valuable knowledge and guidance he brings to the table as we implement our initiatives to further our corporate strategies and goals and build on our strong governance.”