Kaya aiming for seven ganja stores - TSX listing pushed back to September
Published:Tuesday | August 21, 2018 | 12:00 AMSteven Jackson/ Senior Business Reporter
Kaya Inc will open a second medical ganja cafe in Falmouth next month, around the same time it expects to become a publicly listed company trading on the Toronto Stock Exchange, the TSX.
The Jamaican outfit founded by businessman and ganja researcher Balram Vaswani has already taken on a Canadian partner, which has promised backing for the company.
Kaya, which launched its first cafe and dispensary in Ocho Rios in March - becoming the first to market in the process - aims to grow to seven cafes within two years.
The first cafe, plus a ganja farm to supply it, cost $76 million. The second store is a $19 million investment in Falmouth, where the company aims to leverage business from the tourists that pass through the popular cruise port there. That and future dispensaries will also be fed by the St Ann farm.
Vaswani said the Falmouth store should open for business on September 29. The other five are being considered for Negril, Kingston, Portmore, Port Antonio and Port Royal.
Vaswani said Kingston could be the next location for a cafe, saying: "It's pretty likely, but it is not set in stone."
Plans for Kaya to go public via the TSX were first disclosed in April in a market filing about a US$8.7 million deal involving the reverse takeover of Buzz Capital Inc.
Buzz was formed in 2017 and listed on the TSX Venture Exchange in the same year, with the intent of being utilised as a vehicle for a takeover. Under the plan, a private entity called HIKU Brands has already agreed to provide backing for Kaya.
"We would be raising US$8.715 million with our lead investor HIKU, which has already committed US$3.715 million," said Vaswani.
The ganjapreneur is in discussions with two Jamaican brokers who would work with Haywood Securities in Canada in order to provide local investors with an opportunity to invest in the ganja business.
"All local investors would be able to invest via their local broker or directly through Haywood," said Vaswani.
Buzz Capital in its latest filing said negotiations are ongoing for the reverse merger.
"Buzz and Kaya are continuing to work towards the consummation of the qualifying transaction, and have entered into an amendment to the existing letter of intent between parties, pursuant to which the target closing date for the qualifying transaction has been extended to September 15," the company said.
The parties had expected initially to finalise a deal by April 15.
The structure of the takeover involves Buzz enacting a reduction in its ordinary shareholding from 8.2 million to 4.1 million units followed by a name change from Buzz to Kaya Inc. This will be followed by exchange of all issued and outstanding shares of Kaya for common shares of the resulting entity; and then the exchange of all issued and outstanding Kaya options and warrants for shares of the new entity.
The resulting company is expected to have 43 million issued shares of which approximately 89 per cent will be held by the current shareholders of Kaya, and 11 per cent by the existing shareholders of Buzz, according to market filings.