Funds generated by the sale will be set aside to bankroll further expansions to the company's alcohol retail operations.
The Alberta-based cannabis company, Alcanna (TSX:CLIQ), announced last month that it had finalized a deal that will see 19 of its stores sold for $80.8 million to Otter Farm and Home Co-operative.
Under the terms of the agreement, both inventory and additional assets will also be included in the transaction, while closing costs for the project are currently expected to reach $6.9 million.
Alcanna's management have already confirmed that the company intends to use the funds generated by the sale to bankroll further expansions to its alcohol retail operations, which will include the construction of new Wine and Beyond stores and general corporate purposes, while also reducing debt.
"This transaction provides Alcanna with balance sheet strength unprecedented in our Company's history. Alcanna's board and management will be reviewing strategic options that this transaction provides over the coming months," Alcanna Vice Chair and CEO James Burns said.
"There has been a provincial government moratorium on new licenses for private liquor retailers in British Columbia since 2002. However, that moratorium expires in June of 2022 with no indication as yet as to what future direction the government might choose to take."
"As a local-based organization with over 60,000 members and growing, Otter Co-op is extremely well positioned to adapt to any potential changes given the tremendous consumer loyalty Otter Co-op has established with its members."
Alcanna will still retain the right to build and operate large-format Wine and Beyond stores in British Columbia, including one in Kelowna which is currently scheduled to open in the third quarter of 2021.
Stock in Alcanna has continued to perform well over the last twelve months, and despite bottoming out at 1.57 a share in March 2020 it has gradually risen, eventually reaching 7.31 as of close of trading Monday.
Disclaimer: Past performance is not an indicator of future performance.
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