Peak Processing Ltd (ASX:PKP) has secured its first US brand-partner manufacturing agreement, signing a three-year exclusive deal to produce Fryday Kush® THC beverages across 13 US states.
The agreement, struck through wholly owned subsidiary Peak USA Inc. with BTAB Solutions Inc., gives Peak exclusive manufacturing rights for designated Fryday Kush THC beverage products in its US operating territory. The arrangement is binding, effective immediately and has no material conditions precedent.
The deal marks a key step in Peak’s US growth strategy and extends an existing commercial relationship with BTAB, a Canadian partner for which Peak has already commercialised 14 products across multiple categories.
Peak expects to generate value through the manufacture and supply of finished beverage products, with revenue to be derived from commercial production volumes ordered by BTAB over the term of the agreement. The company said the timing and value of future revenues remain unknown and will depend on distribution agreements, customer demand and fulfilment.
Fryday Kush enters beverage category
Fryday Kush is an established cannabis lifestyle brand launched in 2021 and already active across product categories including flower, pre-rolls, concentrates and vaporiser products in select North American and Australian markets.
The new agreement is focused specifically on Fryday Kush THC beverages, a category Peak says is among the faster-growing segments of the US cannabinoid market as consumers look for familiar, social alternatives to alcohol. Peak will manufacture the beverages using its proprietary Envision™ emulsion technology.
Peak managing director and CEO Barry Katzman described the agreement as a “landmark moment” for Peak USA.
“This is a landmark moment for Peak USA. As Canada's leading co-manufacturer of THC beverages, we are excited to extend our successful Canadian partnership with BTAB Solutions into the United States through one of the industry's most recognised and culturally significant cannabis brands.
“The Agreement represents an important validation of our asset-light, scalable US strategy. It establishes our first dedicated US brand manufacturing partnership and demonstrates how we intend to create value by combining Peak's proprietary technology and manufacturing expertise with an established consumer brand seeking to expand within the rapidly developing THC beverage category. It also delivers on our strategy of expanding into the US alongside existing Canadian partners while continuing to attract additional brands of this calibre."
Thirteen-state territory
The agreement covers Pennsylvania, Illinois, Virginia, Ohio, Massachusetts, New Jersey, Nevada, New York, Michigan, Maine, Vermont, Connecticut and Rhode Island. Products will be manufactured through Peak’s established Florida production arrangement using the company’s Envision™ emulsion technology.
Non-executive chairman Manik Pujara said the agreement reinforced the company’s confidence in its US expansion strategy.
"This marks an important milestone in Peak's expansion into the United States, a market the Board believes represents the Company's largest long-term growth opportunity. Securing a partnership centred on an established and recognised brand such as Fryday Kush, together with the momentum the team has already demonstrated in Canada, reinforces our confidence in both management's execution and the Company's broader growth strategy."
About Peak Processing
Peak Processing is an FMCG business specialising in the manufacturing, sales and distribution of THC beverages. The company develops compliant products for adult consumers in regulated global markets, including the US and Canada.