Pegasus Mercantile to acquire Independent Retailers

Executive Summary

• Pegasus Mercantile Inc. has signed an agreement to acquire Independent Retailers Alliance Inc. (IRA), a network of independent cannabis retailers, to accelerate the growth of Canada's largest independent cannabis retail network.
• The transaction involves the acquisition of IRA's shares and assets, including intellectual property and brand names, with an anticipated closing date of October 15, 2025.
• The deal includes a $2-million consideration paid in restricted common stock tied to performance milestones, plus up to $1-million in additional financing, subject to Canadian Securities Exchange acceptance.

Key Details

• Transaction Structure: Pegasus Mercantile is acquiring all shares and assets of Independent Retailers Alliance Inc., including intellectual property, research, data, techniques, processes, brand names, trade names, trademarks, patents, and client/vendor lists.
• Consideration: Pegasus will pay $2-million, represented by restricted shares of common stock issued in tranches tied to performance milestones over a 14-month period.
• Share Restrictions: All payment shares will be restricted for a period of four months and one day from the date of issuance.
• Additional Financing: Financing of up to $1-million will be announced, with specific terms to be discussed.
• Corporate Governance: The acquired entity will operate as a subsidiary of Pegasus. Pegasus has the right to appoint one individual to the board of directors of the company in the first quarter of 2026, subject to board and regulatory approval.
• Closing Date: Anticipated closing is October 15, 2025.
• Regulatory Status: The acquisition remains subject to Canadian Securities Exchange acceptance.
• Strategic Goals: IRA aims to scale its current retail members from 75 to more than 150 stores across Ontario by 2026, with plans to expand into British Columbia, Alberta, and Western Canada to create a national platform.
• Advisory Role: Pegasus Mercantile will serve as the exclusive financial adviser to the alliance.

Notable Quotes

• "Independent Retailer Alliance brings a paradigm shift to the Canadian cannabis sector that it desperately needs. Competition from larger chains and, even still today, grey-market illegal stores makes it near impossible for independent stores to flourish... We feel this will be the game changer for independent cannabis dispensaries and we are excited to be a part of this evolution with Jazz," stated Meris Kott, chief executive officer of Pegasus Mercantile.
• "The vision for the alliance has always been to create a network strong enough to help independents not only survive but thrive," said Jazz Samra, founder of the Independent Retailers Alliance. "This partnership with Pegasus Mercantile gives us the fuel we need to scale nationally, launch new initiatives, and cement ourselves as the strongest voice and support system for independent cannabis retailers across Canada."