Cannabis retailer Kiaro Holdings Corp. has entered Ontario with two strategic acquisitions.
On July 12, the Vancouver-based company announced that it acquired Sculthorp SEO Inc., which does business as Cozy Cannabis.
The move gave Kiaro its first brick and mortar store in Ontario, with a location at 1428 Dundas Street West in the Trinity Bellwoods neighbourhood of Toronto.
This was followed on July 13 with another announcement of an agreement to acquire 2734524 Ontario Inc., which does business as Hemisphere Cannabis Co.
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Hemisphere, which is owned by Aegis Brands Inc., operates seven retail locations in the province, with two additional shops in development.
“Completion of the Transaction will more than double Kiaro’s retail footprint and give it a significant presence in the Ontario retail cannabis market,” stated a July 13 media release by Kiaro.
At present, Kiaro has seven cannabis locations in B.C. and Saskatchewan.
Its flagship store is at 1316 Kingsway in Vancouver.
Online, the company says it has one more store coming in Kelowna, B.C.
The July 13 release quotes Kiaro CEO Daniel Petrov describing the acquisition of Hemisphere as “simply transformational”.
“I expect this transaction will be significantly accretive for shareholders as we push forward towards $50M in target revenue,” Petrov said.
Aegis issued a separate media release on July 13, which noted that following completion of the transaction, Kiaro will operate 16 cannabis retail locations in the country.
In addition, the release stated that the Kiaro is expected to have 18 locations by the end of the first quarter of 2022.
Aegis will transfer ownership of Hemisphere to Kiaro in exchange for a substantial equity interest in the latter company.
“This transaction will enable Kiaro to build a cannabis retailer with a prominent nationwide presence and a clear path to substantially increased revenues,” Aegis president and CEO Steven Pelton said.
After completion of the transaction, which is expected in September 2021, Aegis will hold about 25 percent of Kiaro’s common shares, becoming the latter’s largest individual shareholder.
Going back to the deal with Cozy Cannabis, the transaction also includes three ecommerce platforms.
These are Vaped.ca, Vaped.com, and VaporizersDirect.com.au, which will give Kiaro access to U.S. and Australian markets for consumption accessories.
The deal will be settled with shares and cash. Also, Cozy Cannabis founder and CEO Christian Sculthorp will join Kiaro team as director of ecommerce
Kiaro trades in the TSX Venture Exchange under the ticker symbol KO. As of this post, each share was going for $0.14.
Follow Carlito Pablo on Twitter at @carlitopablo
