Canada’s Organic Flower Investments Group has agreed to acquire an 80% stake in confectionary manufacturer Edibles and Infusions to form a joint venture (JV).

As per the purchase agreement, Organic Flower will buy a stake in Edibles and Infusions JV for an aggregate purchase price equal to up to C$42.5m ($31.6m), payable in common shares in the capital of the company.

Organic Flower has also acquired an option to purchase certain business assets of the JV Partner for C$12.5m ($9.2m).

Edibles and Infusions will design and develop a 50,000ft manufacturing and product formulation facility in Winnipeg, Canada.

“Along with our highly reputable JV Partner, we have firmly positioned ourselves at the forefront of the next phase of cannabis normalisation.”

The facility will be equipped with modern manufacturing equipment capable of producing an assortment of both cannabinoid/terpene-infused products such as gourmet snacks, including caramel popcorn, cheese biscuits, cocoa cookies, salty pretzels, chocolates, gummies, baked goods and powdered drinks.

Organic Flower director and CEO Joel Dumaresq said: “Establishing a controlling stake in this JV is a truly transformative transaction for Organic Flower. Along with our highly reputable JV partner, we have firmly positioned ourselves at the forefront of the next phase of cannabis normalisation, ‘Cannabis 2.0’.

“Armed with this state-of-the-art facility, Organic Flower expects to become the unequivocal leader within the highly lucrative cannabinoid-infused edibles and functional food marketplaces.”

Organic Flower Investments expects the facility to commence operations by the first quarter of 2020.

Edibles and Infusions is working towards finalising applications for a Health Canada Standard Processing Licence, as well as a Cannabis Sales Licence.

The company is also negotiating contract manufacturing deals with Tier 1 Canadian licensed producers in anticipation of the completion of the facility.