Glance Enters Marijuana Fintech Market

“As Canada progresses towards legalization of marijuana, a multi-billion dollar industry in need of financial services is emerging,” says Desmond Griffin, CEO of Glance. “Cannapay Financial’s technology licence from Glance will allow it to bring marijuana industry payments into the digital age by providing a wide variety of Fintech solutions to all levels of the marijuana business, from suppliers to customers. This is inline with our strategy to monetize our robust and constantly advancing technology platform through strategic alliances to address markets that are not on our near term operational roadmap. This deal allows our shareholders to benefit from both significant ongoing revenue as well as equity upside in this exciting space.”

Pursuant to the licence agreement, Glance will grant to Cannapay a non-exclusive, worldwide licence to white label Glance’s mobile payment processing platform and its proven anti-fraud technology, for legal business to business and business to consumer mobile payments in the marijuana industry. The licence will have an initial term of 10 years and will be renewable for two additional 10 year periods. As consideration for the licence, Cannapay will pay to Glance an initial fee of $1,000,000, payable in two payments of $200,000 each in cash and a third payment of $600,000 in cash or in common shares of Cannapay due within 3 years of signing the licence agreement, with the exception that if Cannapay completes an IPO at a price per offered security of $0.25 or higher, Cannapay will issue to Glance, contemporaneously with closing the IPO at a price per security equal to the price per security under the IPO, as many voting shares in payment towards the $600,000 fee as results in Glance holding, in the aggregate, a maximum of 49% of Cannapay’s issued and outstanding voting shares immediately after closing the IPO. Any outstanding amounts to bring the full payment to $600,000 will be due and payable within 3 years of the date of the licence in cash or in common shares of Cannapay. Glance will also receive a 50% royalty on the revenue from all sublicences and will receive additional fees for any development work required for customization and operation of the Cannapay payment platform. In conjunction with the first two payments under the licence agreement, Glance will purchase an aggregate of 8,000,000 common shares of Cannapay at a price of $0.05 per share for a total investment of $400,000, with the result that Glance will own approximately 48% of Cannapay, and Cannapay will be treated as a non-controlled partially owned subsidiary over which Glance exerts significant influence. Separate financial statements for Cannapay will be maintained in accordance with IAS28.

According to a recent study disclosed in the Toronto Star, legalized recreational marijuana promises to spark a $22.6 billion industry in Canada, eclipsing combined sales of beer, wine and spirits. According to Business Insider, the legal weed market is growing as fast as broadband Internet in the 2000s with an annual projected growth rate of 25% through 2021.

Fees from the licence agreement will be recorded in Glance’s financial statements as a related party transaction, as Penny Green is a director and President of both Glance and Cannapay.