US beverage company Jones Soda has revealed details of financing to support its transformation plans to begin the production and sale of cannabis-infused beverages and edibles.
Jones Soda has issued a $2 million convertible debenture to SOL Global Investments Corp and entered into a non-binding term sheet with Pinestar Gold and SOL.
The beverage company intends to use the proceeds of the transactions exclusively for business expansion into the development of cannabis-containing beverages, edibles and related products.
Jones Soda says it will operate its planned cannabis operations through one or more subsidiaries that are separate from its craft beverage business.
“We believe that cannabis-infused beverages and edibles are a perfect fit for the iconic personality of the Jones brand, and that the proposed transactions will lay the groundwork for a strategic transformation of the company to an additional business line that we feel builds on our current business model,” said Mark Murray, president and CEO of Jones Soda.
Jone Soda’s announcement to strategically enter the cannabis market comes two years after SOL – which specialises in the cannabis industry – took a minority stake in the firm.
Under the terms of the agreements, Jones intends to acquire all of the outstanding shares of Pinestar and warrants exercisable into common shares of Pinestar in exchange for an aggregate of 4 million shares of Jones Soda common stock and 1.67 million warrants exercisable into Jones shares.
The term sheet also provides that Pinestar intends to complete an offering of subscription receipts expected to be picked up by SOL and Pinestar shareholders for $8 million.
Murray added: “We are also confident that SOL, along with certain large shareholders of Pinestar will provide Jones with the knowledge, expertise and resources necessary to help us deliver on our growth plans within the cannabis sector.”
The proposed transactions are subject to shareholder and regulatory approval.
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