Kaya Inc, a licensed ganja business in Jamaica that opened its first ganja cafe in Ocho Rios in March, is going public in Canada and will list on the Toronto Stock Exchange. Under the transaction, Kaya will enact a “reverse takeover” with a listed company called Buzz Capital.
The takeover also comes with a separate plan to raise CAD$8.5 million of which CAD$5.5 million is being sought from institutional investors, while another entity called HIKU Brands has already agreed to provide backing of CAD$3 million, said Kaya Inc CEO and founder Balram Vaswani.
The listing is being preceded by a series of transactions, which will see Kaya merging with Buzz. The latter company 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.
Buzz issued a letter of intent about the transaction earlier this month indicating that the companies would finalise their negotiations and secure a deal by April 15. It will result in Kaya shareholders owning nearly nine-tenths of the amalgamated shares.
Vaswani told the Financial Gleaner that the ganja authority in Jamaica was abreast of the dealings to list overseas.
“All contemplated transactions are subject to oversight and approval of the Cannabis Licensing Authority. This includes both Jamaican ownership and directorship exceeding 50 per cent at all times,” he said.
“We will continue to work with all governing bodies as we continue to build a Jamaican brand that can extend beyond the shores of our island. This will give all Jamaicans access to invest and participate in a transparent regulated industry,” said the ganjapreneur via email.
The structure of the takeover deal 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; then the exchange of all issued and outstanding shares of Kaya for common shares of the resulting entity; followed by 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 a press release on the transaction.
Kaya reaped the first legal harvest for sale last month in the presence of the Cannabis Licensing Authority. This harvest will feed the stock of the store or herbhouse, the first of which opened in St Ann.
The costs associated with the development of the cafe, dispensary, and farm to date have surpassed J$76 million.