Halo Collective Inc (OTCMKTS: HCANF) has announced that it will acquire H2C Beverages. This move will allow the company to venture into the functional beverage sector. Halo will also enter a manufacturing and distribution agreement with Elegance Brands Inc.

As per the distribution agreement terms, Elegance Brands will buy $30 million worth of Halo’s Hushrooms and H2C brands for 24 months after Halo releases the products. Moreover, Elegance will distribute the products to retail stores in the U.S

According to the CEO of Halo, Kiran Sidhu, the company believes that Nootropic nutraceuticals could undergo tremendous growth. In addition, acquiring H2C Beverages will give Halo more growth opportunities even though the cannabis sector faces oversupply in Oregon and California.

 The collaboration with Elegance brands will increase mainstream distribution 

Sidhu adds that Halo’s partnership with Elegance Brands will distribute and manage its functional mushrooms and H2C brands to mainstream customers.

The founder and CEO of Elegance Brands, Raj Beri, states that the company’s distribution network could reach thousands of retail locations. Therefore, the company could quickly capitalize on oncoming growth in the functional mushroom and beverage markets.

Beri adds that Halo’s brand could be an asset for the company. The two companies could leverage their brands to expand distribution to their clients. In addition, the distribution deal could make $9 million within 24 months.

Halo has already signed an agreement to purchase H2C Beverages. H2C produced non-psychotropic mushroom and cannabinoid functional beverages. This acquisition will give Halo a good market share in the cannabidiol market, which could be worth $16 billion in the U.S markets by 2025.

The partnership will spread awareness on the benefits of cannabis and mushrooms

The acquisition will also help increase consumer awareness of the benefits of consuming functional mushroom extracts with adaptogens and cannabinoids in small amounts. Halo will also access other products in H2C’s portfolio, including nano-emulsified flavored waters and plant-based beverages with cannabinoids and other substances.

As per the agreement, Halo will issue 7,538,462 common shares to H2C. The agreement’s closing is also subject to approval from the Neo Exchange Inc. Both companies expect to close the deal in January. In addition, an arm’s length finder will receive 603,077 Common shares from Halo.

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