Hiku Brands Company Ltd. DJACF

HIKKU ​​merger ​​and APHIRA ​​$investment$ ​key pts

[bpeters]

What a week this has been!

On December 21, 2017, DOJA Cannabis and Tokyo Smoke announced the merger and strategic investment from Aphria Inc.

Merger creates Canada’s first retail- & brand-focused cannabis producer and APHIRA's investment $12.5 million creates an EXIT strategy  for DOKA/HIKKU

• Two Canadian cannabis lifestyle brands join forces in a transformational transaction, bringing together industry leading management teams, British Columbia curated handcrafted cannabis production, a portfolio of visionary brands and a growing nationwide retail footprint.
• Provides the first public markets investment opportunity focused on cannabis retail and brand; high-margin verticals with significant growth potential.
• A strategic financing of $12.5 million led by Aphria Inc. will bolster the combined company’s cash position to approximately $31 million, which the company plans to invest in scaling up production capacity, expanding its retail footprint and further building-out its portfolio of cannabis brands.

Highlights of the Transformational Transaction

• Creation of the first retail-focused, craft cannabis producer with a portfolio of leading lifestyle cannabis brands: Hiku will be differentiated as the only Canadian craft cannabis producer with significant national retail presence and a growing portfolio of premium cannabis lifestyle brands including DOJA, Tokyo Smoke, and Van der Pop, appealing to a wide variety of consumers across Canada and globally.
• Well positioned to capitalize on Canada’s recreational cannabis market through retail: Hiku has multiple highly recognizable brands and strategies in place to operate retail cannabis stores across various provinces. Vertically integrated operations position Hiku to offer exclusive products in Hiku-owned stores and achieve superior margins versus peers.
• Licensed producer under the Access to Cannabis for Medical Purposes Regulations
  (ACMPR): 7,100 square foot production facility licensed by Health Canada. DOJA’s second facility, a 22,580 sq ft warehouse, will house the FUTURE LAB. The FUTURE LAB is targeting its Phase 1 completion by Q2 2018 and once the facility is fully built-out utilizing an industry leading multi-tier system powered by LED lighting provided by Fluence BioEngineering, DOJA’s annual production capacity is expected to be in excess of 5,000 kgs.
• Retail locations from Eastern to Western Canada, with plans to expand: Hiku will have seven operational, legal cannabis accessory stores with locations across Canada (Ontario, Alberta and British Columbia), representing an unprecedented platform to build brand awareness and reach consumers. Hiku will prioritize retail expansion in provinces allowing private cannabis retail and Tokyo Smoke and DOJA will respond to the Government of Manitoba’s Request for Proposals to establish retail cannabis stores throughout the province.
• Strategic Partnership with Aphria:  Aphria’s strategic investment into Hiku marks Aphria’s first venture into British Columbia’s premium cannabis market. Combined with the Supply Agreement, the partnership with Aphria brings unparalleled experience in cannabis production and ensures secured supply for what is expected to be a supply-constrained market at the onset of legalization.
• Led by industry leading management and team: Hiku management has breadth and depth of expertise, with a proven track record of building and scaling businesses, including SAXX Underwear and a $100 million+ business at Google. The supporting team brings expertise from the retail, cannabis, finance, design, marketing and creative fields.
• Well capitalized for local and global growth: Post-Merger, Hiku is expected to have a cash balance of approximately $31 million and to be well positioned to expand within the Canadian market and enter into the emerging global cannabis markets.
• Enhanced capital markets profile: The combined entity post-financing is anticipated to have a basic market capitalization of approximately $175 million at the transaction price, as well as increased trading liquidity for existing and prospective shareholders.