Freedom Cannabis Inc., a Canadian producer of premier cannabis brands, has formed a strategic relationship with Pervasip Corp (OTCPK: PVSP), and its wholly-owned Seattle-based Zen Asset Management, owners of the Artizen brand to pursue mutually beneficial business opportunities.
The strategic relationship will see the two companies collaborate on areas of mutual benefit, including co-branding and sharing intellectual property. They entered into the relationship after signing a non-binding letter of intent that forms the basis of the agreement.
"For Freedom Cannabis, this is a very important step forward," stated CEO, Johnfrank Potestio. "This provides our company with a very important foothold in the US market that can be developed even further as our two companies begin to collaborate."
The strategic relationship is beneficial to both companies as they build brand awareness in their respective markets. The cannabis companies are licensed producers and managers of premier brands and are quickly gaining market share in both Canada and the U.S.
The LOI also contemplates a potential joint venture between the two companies for Artizen's branded product to be grown at the Freedom facility located just outside of Edmonton, Alberta. This would include the licensing of the Artizen brand in Canada and Freedom licensing its brand to Artizen in the U.S.
The two companies will also explore a potential merger in the future, depending on market conditions and regulatory approvals, that would significantly increase market share in North America. A potential merger would be dependent on due diligence by both parties, Freedom Cannabis pursuing a public offering in Canada, and the legalization of cannabis at the federal level in the U.S.
While the LOI provides a path forward for Freedom to secure a foothold in the US market, the companies are focused on leveraging their synergies in the short term, including the sharing of intellectual property and co-branding of products.
"Freedom and its management team have an impressive foundation for growth, and we are pleased to enter into this relationship, maximizing each other's potential, especially at a time when we are expanding Artizen across the United States. Building on the recognition of Artizen being the 9th largest independent cannabis flower brand in the US, Freedom is the perfect strategic partner to both accelerate our growth and enter the Canadian market" stated German Burtscher, Pervasip's president and CEO.
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