CordovaCann Corp. (Cordova) has partnered with Jackson BevCo through a non-binding letter of intent (the “LOI”) to execute a managed services agreement (the “MSA”) to facilitate the opening and operation of cannabis retail stores within or beside convenience stores owned and operated by Jacksons.
“We are very excited to partner with Jacksons to bring cannabis to locations in which they already operate,” said Taz Turner, chairman and CEO of Cordova. “Having developed and fine-tuned our retail operations in the heavily regulated Canadian markets we are excited to bring our years of experience to this opportunity, and this partnership gives Cordova access to a massive retail footprint in markets in which we operate without the need for capital to build out a retail network. The MSA will be mutually beneficial as it will provide a new and substantial revenue channel for Jacksons and accelerate the revenue and profitability of Cordova’s US operations.”
Jacksons owns and operates 65 convenience stores in the western U.S. under the Big Smoke and Tobacco Connection brand names. Jacksons is wholly owned by Jacksons Food Stores, which was founded in 1975 as a single service station and has grown to be a nationally recognized chain with 361 wholly owned convenience stores and is a joint-venture partner in nearly 2,000 additional convenience stores. Jacksons stores are predominantly located in Washington, Oregon, California, Arizona and Idaho.
Pursuant to the terms of the LOI, Cordova will facilitate the opening of cannabis retail stores in all aspects requested by Jacksons, but with primary focus on regulatory process, compliance, training, security, inventory selection and inventory procurement. The cannabis retail stores opened under the MSA will be owned and operated by Jacksons, and Jacksons will pay Cordova a royalty based on a percentage of revenues generated by these cannabis retail stores. Cordova and Jacksons expect to have the MSA executed by January 2023.
Cordova expects to launch the first cannabis retail stores within the Jacksons footprint in 2023. The initial locations currently being discussed by Cordova and Jacksons are in Washington, Oregon and Arizona. Given that Jacksons already has ideal convenience real estate in its existing locations, it is expected that the stores launched under the MSA will generate substantial revenue and profits from cannabis. Cordova already operates in key states where Jacksons is operating stores and recreational cannabis sales are legal. Cordova will be able to sell cannabis flower and manufactured products to stores opened under the MSA, which is expected to create another significant revenue stream beyond the royalty payments received.
