Heritage Cannabis (CANN.C) announced they have expanded their relationship with Merida Capital Holdings in order to aid Heritage’s expansion into the US.
Heritage hopes to use Merida’s strategic portfolio of companies to assist them, providing them with additional contacts and existing relationships they can utilise for their expansion. Merida became involved with Heritage Cannabis as a strategic investor when Heritage acquired the Premium 5 brand, of which Merida was the largest non-insider investor.
The press release says they will focus on expanding to states where cannabis is legal for medical or recreational use, beginning with Michigan, Missouri, West Virginia, and California.
“Entering the U.S. cannabis market with a clear path and strong partner is a pivotal and transformational moment for Heritage,” stated David Schwede, President of Heritage Cannabis. “The work done over the past three months with integrating Premium 5, increasing working capital and removing restrictive lending covenants has laid the foundation for today’s announcement. We are excited to reveal more of our vision to create shareholder value through this accretive expansion. Further, our growing relationship with Merida underscores the strength of the business and will accelerate our state by state expansion and access to nine purposefully selected U.S. markets, including the initial four we’re targeting immediately. This is the start of a number of strategic pursuits planned to drive higher profitability and leverage our growing brand portfolio.”
A sizeable portion of Merida’s investments are in Cannabis companies, which will provide Heritage with trusted relationships in the US right off the bat.
It may seem bizarre for Heritage to begin part of their push into the US in West Virginia, a state not exactly famous for its cannabis culture. But they are likely trying to use Merida’s connection with Harvest Medical Care, one of the state’s 10 licensed cannabis cultivators.
The same goes for Michigan, where Heritage is likely hoping to capitalise on Merida’s investment in 3Fifteen Cannabis, who currently have 12 locations in the state.
Working with Merida and effectively utilising their contacts can give Heritage a leg up in a growing American cannabis market (especially in less saturated cannabis markets), and, as an investor in CANN, Merida also stands to benefit from their success.
“Merida is excited to strengthen our relationship with Heritage and introduce Heritage’s extraction expertise and Premium 5’s brand capabilities to our portfolio of 50+ companies. We specifically believe this relationship will create incredible synergies for our limited license operators, which will immediately open shelf space to Premium 5’s products in large markets like Michigan and Missouri,” commented Merida Partner Max Gerard.
CANN’s share price rose slightly following the news and is currently trading at $0.14.
Full disclosure: Heritage Cannabis is an Equity.Guru marketing client.