FinCanna Portfolio Company, QVI Inc., Provides Update on Cherry Kola Farms JV and “Own Brand” Production Plans to Accelerate Retail Sales Across California
FinCanna to Raise up to $2,000,000 by way of a Private Placement
Vancouver, British Columbia, March 2, 2022 - FinCanna Capital Corp. (“FinCanna”) (“the Company”)(CSE: CALI) (OTCQB: FNNZF) an investment company focused on the U.S. licensed cannabis industry, reports that its portfolio company, QVI Inc., a cannabis-infused product manufacturer located in Sonoma County, California is pleased to provide an update further to its previously announced Joint Venture (“JV”) agreement with Cherry Kola Farms (“CKF”), an award-winning producer of premium cannabis products, and recent activities regarding QVI’s new “manufacturer to retail” revenue model featuring its own branded “low-cost” edibles products.
In conjunction with QVI’s shift in strategic direction to focus on its own branded products and its JV production relationship with CKF, QVI has re-branded its 10,000 square foot cannabis manufacturing facility to “West County Brands” (“WCB”), a name reflective of its Sonoma California location.
The Cherry Kola Farms JV has been operational since late December. Development activities to date include acquisition of biomass for the continuous production of live rosin, calibration of manufacturing equipment to ensure rapid scalability, flavour profiling, packaging development and production test runs that are now complete. The initial market rollout of Cherry Kola Farms in demand products is currently underway with the live rosin products now on retail shelves in select dispensaries across the state.
Additionally, the new “manufacturer to retail” model’s streamlined production approach of its own branded products are priced to disrupt the market. West County Brands’ “MYTHC Life”, “GOTHC Life” and “Huckleberry” are approaching commercial launch. These unique brands are disruptively priced at up to a ~50% discount to current market prices. The “manufacturer to retail” business model is designed to deliver higher volumes in fewer SKU’s and is anticipated to eliminate costs and increase margins across the value chain. These savings can be allocated to incentivize QVI’s distribution partners, retail dispensary owners, and ultimately create a better priced offering to consumers. Product recipes including SOPs (standard operating procedures) have been finalized and tested in the manufacturing environment. Branding and package design developed with direction from market experts are also nearing completion, and a staged launch of MYTHC Life, GOTHC Life and Huckleberry products is expected to begin in March 2022.
To accelerate its sales and market penetration for both Cherry Kola Farms’ live rosin products and West County Brands’ own line of cannabis edibles, QVI has engaged Petalfast Inc., a full spectrum cannabis growth company specializing in sales & marketing support for its client brands. Additionally, the company has initiated commercial distribution arrangements with Calyx Brands and Royal Distribution who collectively have direct relationships to the vast majority of dispensaries and delivery businesses in the state, enabling them to provide in depth commercial representation across California. These relationships have been instrumental in providing market analysis, product and packaging design guidance, and are directing the market rollout strategy for both Cherry Kola Farms’ live rosin and West County Brands’ products.
To support the launch of this initiative FinCanna intends to issue up to 20,000,000 Units at a price of C$0.10 for total gross proceeds of up to $2,000,000 by way of a non-brokered private placement. Each unit will consist of one common share of FinCanna and one common share purchase warrant (a “Unit”). Each warrant will be exercisable to acquire one common share of FinCanna at an exercise price of $0.20 for a period of 24 months from the date of the closing of the private placement (a “Warrant”). The Warrants will be subject to acceleration at FinCanna’s discretion on the 30th day after FinCanna gives notice in the event that FinCanna’s common shares trade on the CSE on a volume weighted average price (“VWAP”) basis of C$0.30 or more for a period of 10 trading days. If at any time during the term of the Warrants the closing price (or closing bid price on days when there are no trades) of FinCanna’s common shares quoted on the Canadian Securities Exchange is equal to or greater than $0.30 per common share for 10 consecutive trading days, then FinCanna shall have the right to accelerate the Warrant expiry date to the 30th day after the date on which FinCanna gives notice to the subscriber in accordance with the certificates representing the Warrants.
FinCanna has agreed to pay a finder’s fee by way of Cash and/or Warrants equal to 7% of the aggregate Units subscribed for pursuant to the subscriptions arranged by such finders. Each Warrant shall be exercisable for one common share at a price of C$0.20 for a period of 24 months following the closing date of the Private Placement.
The closing of the private placement is expected to occur on or about March 25, 2022 and is subject to be the receipt of all necessary regulatory approvals. All securities issued pursuant to the Private Placement will be subject to a four month hold in accordance with applicable Canadian securities laws. There is no material factor material change regarding FinCanna that has not been generally disclosed. FinCanna intends to use the net proceeds from the Private Placement to fund the launch of the new “manufacturer to retail” revenue strategy as well as ongoing working capital and general corporate purposes.
Andriyko Herchak, CEO of FinCanna Capital said, “It's a very exciting time for our business. We are rapidly approaching market launch of our own value priced edibles and are currently in the market with our premium “live rosin” products with our highly regarded Joint Venture partner, Cherry Kola Farms. We are confident this focused approach will deliver strong results. More efficient production, in-demand products and the scalable quality assured production capabilities of West County Brands combined with the deep relationships we’ve developed in the retail market truly sets QVI up for the success we always believed was possible. We look forward to updating our shareholders and investors as we continue our expansion into retail markets across the state.
Annie Holman, Co-Founder and CEO of QVI said, “Re-naming to West County Brands is reflective of the new and exciting opportunities focused on our own branded products as well as partnering with Cherry Kola Farms, one of the most respected names in the industry. We’ve got a world class manufacturing facility and a clear path to maximizing the significant production potential of West County Brands.”
The legal U.S. cannabis market is expected to reach more than US$41 billion in annual sales by 2025 with California, the single largest market in North America, representing an estimated 20% market share or US$8.2 billion and edibles comprising over $900m of the overall California Market (New Frontier Data)
About FinCanna Capital Corp.
FinCanna is an investment company that provides growth capital to rapidly emerging private companies operating in the licensed U.S cannabis industry. FinCanna is focused on delivering high impact returns to its shareholders by way of a strategically diversified investment portfolio.
QVI, which stands for Quality, Value and Integrity, is located in Sonoma County, California. Their purpose-built facility previously known as The Galley and now West County Brands is differentiated from other manufactures by its proven automated capabilities to produce virtually all high-value cannabis products at large volumes under one roof. The facility is built to FDA and CDPH standards and is focused on high demand areas of production; Edibles, Topicals, Tinctures, Chocolates, Hard Candies, Gummies, Beverages, Vapes, Pre-Rolls and Flower Packaging.
QVI’s immediate goal is to become the premier manufacturer in California, the largest single market in North America and, upon success, to license products nationally and globally.
FinCanna Capital Corp.
Andriyko Herchak, CEO & Director
Information set forth in this news release contains forward-looking statements or forward-looking information (collectively, “forward-looking statements”) under applicable securities laws. Forward-looking statements herein include,, without limitation, statements about anticipated benefits of the joint venture agreement with Cherry Kola Farms (CKF); the launch (and timing thereof), implementation and anticipated benefits of the new “manufacturer to retail” revenue model and strategy, including anticipated superior margins, better pricing and implied profitability; the $2 million in private placement financing; and future plans and strategies of the Company. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, risks that the joint venture with CKF and the new “manufacturer to retail” model and strategy may not result in the anticipated benefits to the Company, or at all; the Company may not be able to raise $2 million in private placement financing, or any funds at all; the Company may not receive approval for the $2 million financing; and the risks identified in the CSE listing statement available at www.SEDAR.com and other reports and filings with the applicable Canadian securities regulators. Forward-looking statements are made based on management's beliefs, estimates and opinions on the date that statements are made, and the respective companies undertake no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable securities laws. Investors are cautioned against attributing undue certainty to forward-looking statements.