MJardin Acquires GrowForce, Begins Trading On CSE

MJardin Group signed a letter of intent to acquire Toronto-based cannabis company GrowForce Holdings Inc. MJardin will own 100% of the outstanding shares of GrowForce in an all-stock deal valued at approximately C$275 million. In addition to that, MJardin began trading on the Canadian Securities Exchange using the symbol MJAR.

MJardin projects that it will bring in $162 million in revenue in 2019 according to an investor presentation. The 2020 estimates are for $325 million in revenue.

“With more than ten years of professional cannabis cultivation, processing, distribution and retail, MJardin is among the world’s most experienced cannabis companies, with a proven track record of operational excellence,” said Rishi Gautam, Chairman & Chief Executive Officer of MJardin. “Listing on the Canadian Securities Exchange is a significant milestone in our evolution and a testament to our team’s dedication and focus on building a preeminent global cannabis management platform.”

Grow Force Acquisition

Once the acquisition is completed, the new MJardin Group will have 49 facilities operating or under development across North America, cultivating approximately 87,000 kg of finished product per annum and managing 23 cultivation facilities, two outdoor grows, five extraction facilities and 19 retail dispensaries across four U.S. states and four Canadian provinces.

GrowForce shareholders will receive 0.375 MJardin common shares for each GrowForce common share held. Based on MJardin’s common share price of $12.00 per share pursuant to the Company’s October subscription receipt financing, the implied consideration to GrowForce shareholders is $4.50 per share. The combined company is anticipated to have a pro forma cash balance of approximately C$65M.

“The combination of MJardin and GrowForce provides the foundation to create a preeminent global cannabis management platform with what we believe is unparalleled experience in cannabis cultivation, processing, distribution, and retail,” said Gautam. “We are excited to bring both companies together under one comprehensive platform as we enter the public markets, further invest in our business and execute on our growth strategy.”

Looking Ahead

In the U.S., MJardin said it would continue expansion by entering key-markets via acquisitions and organic growth and increase its existing footprint by developing vertically integrated networks owning the “Seed to the Shelf.” The company plans on focusing on Florida, California, Massachusetts, New York, and Arizona. In the Canadian market, MJardin plans on taking over existing Canadian Licensed Producers and retail assets.

Internationally, MJardin will focus on Spain, Italy, Germany, and Switzerland. The company is currently, forging partnerships with local players as the regulatory framework requires a country-specific strategy and approach. The company also plans on establishing contacts with Universities and pharma players to develop R&D initiatives to address the nascent European medical market.

The company will look to Latin America and Africa as focus regions to build low-cost cultivation facilities. It is currently in talks for expansion initiatives in Colombia and Uganda.

Debra 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.


2 comments

  • Tony

    November 17, 2018 at 5:48 pm

    Was the MJAR an IPO at tsx this past week Nov 15/18, and at what price?
    Thank you
    Tony

    Reply

    • Debra Borchardt

      November 19, 2018 at 8:36 am

      The shares were priced at $12, but the stock opened at $6.75.

      Reply

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