Kaya , a ganja company based in Kingston, has entered into a joint venture with California, United States-based NUGL Inc, and indicates that it might be on its way to securing funding for further expansion.
NUGL said it inked the deal to share intellectual property and also pursue merger talks.
Kaya runs a licensed cultivation facility, processing facility, three retail dispensaries, and conditional licences to transport and operate therapeutic wellness spas.
The company was the first to open a medical ganja retail location in Jamaica in March 2018. It is now a supplier and exporter of medical ganja throughout the Caribbean and South America through its franchise with Quantum Ventures in Punta Del Este, Uruguay.
NUGL has agreed to issue, under the agreement, a series of tranches, the sum of US$400,000 in convertible notes. It was indicated that, should the companies not complete the merger, the $400,000 note will convert into equity of Kaya.
NUGL also disclosed that it has filed with the US Securities and Exchange Commission under Regulation A, which allows it to pursue further fund raising for expansion.
Regulation A is an exemption from registration for public offerings and has two offering tiers: Tier 1, for offerings of up to US$20 million in a 12-month period; and Tier 2, for offerings of up to US$75 million in a 12-month period.
NUGL stated in a company release on August 9, 2021, that it has filed a REG A and has identified five Kaya ventures in three additional countries. Tangiers Capital, a long-time investor of NUGL, has provided bridge funding to facilitate the transaction.
The release said the proposed merger will give both NUGL and Kaya “an opportunity for further expansion and diversification internationally as more countries decriminalise or put in place new regulatory and legal frameworks for the sale and use of cannabis.”
The companies said the joint venture agreement allows Kaya and the company to begin utilising each other's intellectual property “to strengthen each brand and create jointly owned intellectual property,” with the ultimate aim to work towards a definitive merger transaction.
NUGL CEO CJ Melone indicated that the proposed merger will benefit the shareholders of NUGL Inc and capitalise on the expansion of the Kaya brand internationally.
Bali Vaswani, chairman and CEO of Kaya said in the companies' release: “We introduced a ganja retail experience in 2018 by tailoring an Amsterdam style coffee shop culture to modern-day legal Jamaica by respecting the roots of the culture of the island while maintaining the quality of high-grade medical ganja based on international standards. We are very excited to work with the team at NUGL which is just as passionate about our brand and look forward to enhancing their media platform with new and immersive live content from each of our locations that can house over 1,000 patrons. Our partnership with NUGL provides us with a platform for immediate access to the public markets for capital for growth through acquisitions and partnerships.”
The deal is subject to customary closing conditions, including negotiation of definitive agreements and approval by the Jamaican Cannabis Licensing Authority, it was stated.