MedReleaf Corp. (MEDFF) stock popped over 7% on the OTC Marketplace following the announcement of a $100 million bought deal. Shares jumped over 7% to lately trade at $23.66. This is near the high of its 52-week range of $24.99.
The company announced that it has entered into an agreement with Canaccord Genuity Corp. and GMP Securities L.P. to purchase, on a bought deal basis 3,800,000 units of the company at a price of $26.50 per share for aggregate gross proceeds of $100.7 million. The deal is expected close on or around January 31, 2018.
According to the company statement, MedReleaf plans on using the net proceeds to finance the acquisition and/or construction of additional cannabis production and manufacturing facilities in Canada as well as in other jurisdictions with federal legal markets.
Each unit will consist of one common share and one-half of one common share purchase warrant of MedReleaf. Each warrant will be exercisable to acquire one common share of the Company for a period of two years following the closing date at an exercise price of $34.50. In the event that the volume weighted average trading price exceeds $51.75 for ten consecutive days, MedReleaf will have the right to accelerate the expiry date of the warrants upon not less than fifteen trading days’ notice.
MedReleaf is the first and only ICH-GMP and ISO 9001 certified cannabis producer in North America. MedReleaf is an R&D-driven company dedicated to patient care, scientific innovation, research and advancing the understanding of the therapeutic benefits of cannabis. Sourced from around the world and carefully cultivated in one of two state of the art facilities in Ontario, MedReleaf delivers a variety of premium products to patients seeking safe, consistent and effective medical cannabis.
Cannabis stocks tumbled last week after Attorney General Jeff Sessions rescinded the Cole Memorandum which gave a level of protection to the cannabis companies in U.S. The Cole Memo also made Canadian companies feel a little more secure when dealing with the U.S. So far there has been little response with regards to immediately arresting companies engaged in the cannabis industry. Instead, states, where marijuana has been legalized, have vowed to fight back.