Jones Soda Co., a craft soda maker known for experimental flavors and an irreverent attitude, is stepping into the realm of cannabis-infused drinks and edibles.
The company announced Feb. 15 that it had acquired a Canadian company — somewhat counterintuitively, a gold and silver mining company. They plan to use that company and $11 million in financing to develop their new line of cannabis treats.
Jones is based in Seattle and the mining company, Pinestar Gold, is headquartered in Vancouver, British Columbia. This allows Jones to become a public reporting company in Canada.
“By completing the arrangement and concurrent financing, we have taken a significant step towards the implementation of the company’s planned expansion into the cannabis sector,” said Jones’ president and CEO, Mark Murray, in a press release.
“By completing the Arrangement and Concurrent Financing we have taken a significant step towards the implementation of the Company’s planned expansion into the cannabis sector.”
— Mark Murray, President and CEO of Jones Soda Co.
He added that the $11 mil in concurrent financing “will be used towards the development of the company’s planned cannabis-infused beverages and edibles business line.”
Jones could potentially make THC and CBD beverages, as long as they’re in compliance with local laws and regulations, per an October filing with the U.S. Securities and Exchange Commission.
The filing also shared the company’s goal to develop and launch new products in line with consumer beverage trends — a nod to decreasing interest in sweet sodas across the industry.
This plan has been in the works for awhile.
In July 2019, Sol Global Investments bought 15 million shares of Jones Soda through its hemp portfolio company Heavenly Rx. That gave Heavenly Rx an ownership stake of 25%, with plans to bring its share up to 51%. Jones said it planned to use the capital to develop CBD drinks.
Later that year, the company’s president and CEO said they were waiting on guidance from the U.S. Food and Drug Administration before bringing any CBD products to market. Two years later and counting, the FDA has yet to create a regulatory framework.
In early 2020 Jones announced it was testing its first CBD product. It also announced changes in company leadership.
In July 2021, Jones reiterated its plans to enter the cannabis beverage sector, and doubled down by issuing a $2 million convertible debenture (long-term debt that can later be converted into shares of equity stock) to Sol Global. Jones also announced that it had entered into a non-binding agreement with Pinestar Gold.
“We believe that Cannabis-infused beverages and edibles are a perfect fit for the iconic personality of the Jones brand,” Murray said at the time.
That deal has now come to fruition.
Hemp Industry Daily described Pinestar Gold as a shell company, meaning it has no meaningful assets or business operations and serves primarily to allow Jones entry to Canada as a business. (Although the term “shell company” carries a stigma, they’re legal and do have legitimate uses.)
Jones listed its Canadian shares on the Canadian Securities Exchange and began trading under the ticker symbol “JSDA” on February 18, 2022.
In the days before Jones had received final approval from the CSE, Murray said, “The listing of the company’s shares of common stock on the CSE would not only increase the liquidity of our shares but would also enable the company to appeal to potential investors in Canada as well as the United States as the company’s share of common stock would have an active trading market on both sides of the border.”