CannaRoyalty's AltMed Spinoff Reaps 168% Return On Investment

CannaRoyalty Corp.  (CNNRF) entered into a binding letter of intent with Tidal Royalty Corp. (TDRYF) to acquire the company’s equity stake and royalty entitlement in Alternative Medical Enterprises LLC or AltMed for C$8 million. CannaRoyalty will continue to have the right to license MÜV products in CaliforniaNevadaCanada and other select markets. CannaRoyalty said that the sale of AltMed represents a roughly 168% return on investment for its shareholders.

“The sale of our equity stake and royalty in AltMed advances our stated strategy of realizing value for shareholders on assets that are deemed non-core to our business,” said Marc Lustig, Chairman, and CEO of CannaRoyalty. “The substantial gains from our successful investment in AltMed will provide CannaRoyalty with capital to continue to expand its distribution and brand network in the California market while offering CannaRoyalty shareholders a significant return on investment.”

AltMed is a Florida-based licensed cannabis business operating in the state of Florida that exclusively manufactures and distributes a line of cannabis-infused products marketed under the MÜV™ brand. NuTrae, the company that actually makes the MüV products is a subsidiary of AltMed and launched the MüV product line in 2016 in Arizona.

Tidal Royalty is a Toronto-based company that aims to provide royalty financing to the U.S. regulated cannabis industry. The company will provide operators with the funding they need to grow their business. Tidal says that its operators will benefit from non‐dilutive capital while investors get top‐line access to a diversified portfolio of companies.  The company has raised approximately $40MM to date by way of private placements, which it intends to use primarily for royalty financings. The company’s board includes Hugo Alves (President of Auxly
Cannabis Group (XLY) and Lustig.

CannaRoyalty currently holds a 6.14% ownership position in AltMed and has a 3.5% royalty on global net sales of the following MüV products: Transdermal patches, metered dose inhalers, and patent-pending transdermal gels.

Lustig went on to say, “We were early to identify the long-term potential in AltMed and MüV as vital players in the North American cannabis value chain and are confident that the businesses will be valuable additions to Tidal Royalty’s diverse portfolio. As CannaRoyalty continues to grow and build a solid presence in California, we look forward to partnering with the experienced team at Tidal Royalty.”

Stock Performance

CannaRoyalty was lately trading at $3.92 on the OTC Markets. This is lower than it’s 52-week high of $4.58, but way above its year low of $1.51. The company recently reported record financial results for its second quarter with revenues of $3.5 million.

 

Debra Borchardt

Debra BorchardtDebra Borchardt

Debra Borchardt is the CEO, Co-Founder, and Editor-In-Chief of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Masters degree in Business Journalism from New York University.


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