acquisition Archives - Green Market Report

Debra BorchardtDebra BorchardtApril 18, 2019
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6min970

Canopy Growth Corporation  (TSX: WEED) (NYSE: CGC) is acquiring Acreage Holdings, Inc. (CSE: ACGR.U) (OTC: ACRGF) in a deal valued at $3.4 billion. However, the deal will not be consummated until cannabis is federally legal in the U.S. and assuming the shareholders approve as well as the  Supreme Court of British Columbia.

Once the shareholders and the Supreme Court approve, Acreage Holders will immediately receive a payment of US$300 million or approximately US$2.55 per Acreage Subordinate Voting Share. The company also said in a statement that holders of subordinate voting shares of Acreage will get 0.5818 of a common share of Canopy Growth stock for each Acreage Subordinate Voting Share held at the time of closing of the transaction.

“Today we announce a complex transaction with a simple objective. Our right to acquire Acreage secures our entrance strategy into the United States as soon as a federally-permissible pathway exists,” said Bruce Linton, Chairman, and co-CEO, Canopy Growth. “By combining Acreage’s management team, licenses and assets with Canopy Growth’s intellectual property and brands, there will be tremendous value creation for both companies’ shareholders.”

Complex is an understatement. These companies are based in different countries with varying levels of shareholder ownership and voting rights. Add in the inclusion of Constellation Brands (STZ) and it becomes more complicated. Plus, there is the issue of legalization in the U.S., which it seems both companies are confident will happen sooner rather than later. Shareholder approval is expected to occur in June.

Jonathan Sherman and Jamie Litchen, partners at Cassels Brock who acted on the Acreage transaction for Canopy Growth said, “Canopy Growth’s acquisition of Acreage Holders is the most complex M&A transaction completed in decades. In this deal, one company has conditionally acquired another to be able to operate outside of a jurisdiction whereby the product or service would be considered legal. Canopy Growth’s listing on the TSX and NYSE and involvement of its largest shareholder created a regulatory environment to structure a deal of this magnitude successfully.”

“From the first day we created our company, providing exceptional customer care and delivering shareholder value have been our top priorities. This transaction will help accomplish both,” said Acreage Holdings Chairman, CEO and President Kevin Murphy. “When the right is exercised having access to Canopy Growth’s deep resources will enable us to innovate, develop and distribute quality cannabis brands across the U.S. and continue expanding our U.S. footprint. At the same time, a confluence of factors are making it much more difficult for a multi-state operator to achieve its full potential, including the enormous amount of cash required to scale. Our Board of Directors, management team and I are pleased to deliver significantly increased liquidity to our shareholders and put ourselves in an even stronger position to deliver continued and significant upside.”

Acreage Leadership

Acreage President, George Allen will depart the company effective immediately and Acreage Chairman and CEO Kevin Murphy will assume the duties of President.

The Acreage board has approved of the deal, but there wasn’t any information as to whether the well-known directors like former Speaker John Boehner, former Canadian Prime Minister Brian Mulroney and former Massachusetts Governor and current Presidential candidate Bill Weld will be on the new board. Acreage Holders will hold approximately 12.1% ownership in Canopy Growth (on a pro forma basis) and up to 16.6% if permitted acquisitions are completed prior to the Trigger Event.

The companies said in the statement that they will also execute a licensing agreement granting Acreage access to Canopy Growth’s award-winning line-up of brands such as Tweed and Tokyo Smoke, along with other intellectual property. Once the Right is exercised, Acreage will become part of a leading global cannabis company with access to markets beyond the U.S. Until then, the two companies will continue to operate independently.

Matt Karnes, Founder and Managing Partner of GreenWave Advisors said, “This deal positions Canopy Growth as a leader in the U.S. market while providing Acreage with near term liquidity and other strategic opportunities. It is not surprising that, within expectations of a coming end of U.S. prohibition,  a Canadian LP/U.S. MSO combination would occur. We further believe that the timing and structure of this deal could facilitate similar moves by other Canadian entities as well as further consolidations among U.S. MSOs that could possibly then look towards Canadian acquisitions. We hope that a transaction of this magnitude will help increase pressure on Congress to more swiftly address changes in federal law as the US is increasingly taking a back seat to Canada and other nations in the burgeoning global cannabis market.”

 

LLC


Debra BorchardtDebra BorchardtApril 1, 2019
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7min2570

Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF)  is acquiring CannaRoyalty Corp. also known as Origin House (CSE: OH) (OTCQX: ORHOF) in a deal valued at C$1.1 billion or C$12.68 per Origin House Share (based on the Exchange Ratio and the closing price of Cresco Labs Shares on March 29). The deal looks to be the largest public company acquisition in the history of the U.S. cannabis industry.

The combined company will be one of the largest vertically-integrated multi-state cannabis operators in the U. S.; a leading North American cannabis company, by footprint; and one of the largest cannabis brand distributors.

“The acquisition of Origin House is another example of our focused and disciplined approach to creating a meaningful presence in key cannabis markets through excellence in brand development and distribution,” said Cresco Labs CEO and Co-founder Charlie Bachtell. “It establishes Cresco Labs as the leading multi-state operator with one of the largest distribution platforms in California. Having a similar priority on consumers and consumer brands with the expertise of executives from the largest wine and liquor distribution company in the United States, the team at Origin House has established the premier cannabis distribution company in the largest cannabis market in the world. It’s an incredible platform for Cresco in California and the distribution infrastructure will provide a valuable framework to leverage as we scale our platforms in other states.”

Origin House

Origin House is a growing cannabis brands and distribution company operating across key markets in the U.S. and Canada, with a strategic focus on becoming a preeminent global house of cannabis brands. The company’s foundation is in California where it delivers over 130 branded cannabis products from 50+ brands to the majority of licensed dispensaries. Origin House’s brand development platform is operated out of five licensed facilities located across California and provides distribution, manufacturing, cultivation and marketing services for its brand partners. Origin House is actively developing infrastructure to support the proliferation of its brands internationally, initially through its acquisition of Canadian retailer 180 Smoke.

“From an Origin House perspective, this transaction is directly aligned with our strategy to build a leading portfolio of cannabis brands in California and to rapidly and accretively take those brands to the rest of the U.S. market, as well as the Canadian market,” said Marc Lustig, Chairman, and CEO of Origin House. “By partnering with one of the largest and most innovative U.S. multi-state operators in existence today, Origin House will supercharge its growth and be in a position to offer its brand partners access to 10 additional states, with licenses and supporting infrastructure already in place.  This Transaction is not the first opportunity we have reviewed, but it has received the unanimous support of our board and large shareholders because we are confident that together we will be in a position to truly change the face of the global cannabis industry while continuing to create significant value for the shareholders of both companies.”

Terms Of The Deal

Cresco Labs will acquire all of the issued and outstanding Origin House Shares, with each holder of Origin House common shares receiving 0.8428 Cresco Labs Shares for each Origin House Share (and each holder of an Origin House proportionate voting share receiving 84.28 Cresco Labs Shares for each proportionate voting share held), which implies a price per Origin House Share of C$12.68 (on an as-converted basis), representing a total consideration of approximately C$1.1 billion (on a fully-diluted).

Origin House shareholders will hold approximately 20% of the issued and outstanding Cresco Labs shares on a pro forma, fully-diluted and as converted basis, enabling Origin House shareholders the opportunity to participate in the expected value created through the deal. The company said there would be an immediate premium to Origin House shareholders of approximately 26% over the 30-day volume weighted average price.

Upon completion of the acquisition, as well as the receipt of licensure in Michigan and the closing of the company’s pending acquisition in Florida, Cresco Labs will have operations in 11 states, 23 facilities, more than 1.5 million square feet of cultivation, and licenses to operate up to 51 retail dispensaries. Cresco Labs brands will be sold in over 725 dispensaries across the United States.

“We are excited to welcome the Origin House team to the Cresco family,” said Cresco Labs President and Co-founder Joe Caltabiano. “With the addition of Origin House and its vast distribution network in California, we will have access to incredibly valuable real-time market data and insight into consumer buying patterns that will inform our product development strategies and reinforce our brand strength. In addition to their brand building and distribution expertise, Origin House has a very experienced M&A, corporate development and capital markets team that will be extremely valuable as we continue to expand and add scale through additional transactions. With respect to the capital markets impact, with the equity issued through this transaction, we expect to have substantially more shares in our float, which we believe will provide ample liquidity for larger institutional investors looking to deploy capital into the cannabis space. We expect that our larger scale and improved liquidity following this acquisition will positively impact our ability to attract a larger universe of potential investors and reduce our cost of capital in the future.”

 

 


Debra BorchardtDebra BorchardtMarch 18, 2019
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4min2710

Curaleaf Holdings, Inc. (CSE: CURA / OTCQX: CURLF) is acquiring Nevada-based Acres Cannabis in a deal valued at $70 million that is expected to close in 2019. According to the company statement, Acres operates Nevada’s largest cultivation facility, a state-of-the-art production and extraction lab and an immersive cannabis dispensary located in the city of Las Vegas, adjacent to the Strip, with a second dispensary under construction.

The acquisition is valued at $70 million, with $25 million to be paid in cash, $45 million to be paid in Curaleaf stock and additional consideration to be paid if certain financial targets are exceeded.

“The acquisition of Acres is a major step in expanding our vertical platform in Nevada. Acres operates a flagship dispensary in the heart of Las Vegas, complementing our existing assets in the state extremely well, and importantly, we can control the consistency, quality, and production cost of our own cannabis products,” said Joseph Lusardi, CEO of Curaleaf. “We have built the most accessible, trusted and reliable cannabis brand and are extremely excited about the prospects in Nevada both for retail and wholesale activity.”

Curaleaf said that the Acres acquisition will significantly increase its cultivation and manufacturing operations from which Curaleaf will supply its own flagship dispensary at 1736 Las Vegas Blvd in Las Vegas, scheduled to open in the second quarter of this year. Curaleaf said it will further continue the operation of its indoor grow facility, located near Las Vegas.

The addition of Acres’ cultivation platform will provide Curaleaf with 42,000 sq. ft. of functioning climate-controlled greenhouses and 227,000 sq. ft. of outdoor cultivation in Amargosa Valley. The site is currently under construction, adding another 133,000 sq. ft. of capacity. At over 400,000 sq. ft., the facility is expected to generate 100,000 pounds of dry flower per year at full scale. During the fourth quarter of 2018, Acres harvested over 5,000 pounds of flower.

“Curaleaf’s management, vision, and rapid expansion plans made them the natural fit for Acres,” said John Mueller, CEO of Acres. “Acres believes Curaleaf is very well positioned to continue to be the largest cannabis operator in the U.S. giving our partners significant upside.”

Acres also operates a 19,000 sq. ft. dispensary in Las Vegas. The cannabis experiential store is open 24 hours a day, 7 days a week, and hosts America’s first marijuana farmers market every weekend. Steeped in the cannabis culture, the facilities offer a museum and open view processing kitchen where customers can view the processing of edibles and extracts. Acres also has a second dispensary in Ely, Nevada currently under construction and scheduled to open later this year. The dispensaries are expected to be branded as Curaleaf by year-end to further expand its leading footprint as the largest operator of single-branded dispensaries in the U.S.

 

 

 


Debra BorchardtDebra BorchardtMarch 13, 2019
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4min8730

Acreage Holdings, Inc. (CSE: ACRG.U) (OTCQX: ACRGF) delivered fourth-quarter revenue of $10.5 million for an increase of 380% over the previous year’s $2.1 million. Acreage reported a whopping fourth-quarter net loss of $217.6 million. The pro forma revenue* for the fourth quarter was $22.9 million and the pro forma adjusted net loss*, which excludes certain non-cash charges and non-recurring items, for the fourth quarter was $10.8 million.

Fiscal 2018

The full year fiscal 2018 revenue of $21.1 million increased 173% over last year’s $7.7 million. The pro forma revenue*  was $77.2 million for the full year fiscal 2018. The full year fiscal 2018 net loss of $219.7 million was primarily driven by non-cash charges and non-recurring items. The pro forma adjusted net loss*, which excludes certain non-cash charges and non-recurring items was $30.3 million for the full year fiscal 2018.

Growth

The company has been on a tear with its expansion During the fourth quarter of 2018, Acreage opened two dispensaries under its The Botanist brand in Buffalo, NY and Worcester, MA, and acquired one dispensary in Thames Valley, CT, ending the year with 19 dispensaries (as of today, Acreage has 24 operational dispensaries).

Growth doesn’t come cheaply. During 2018,  Acreage spent over $200 million of capital in various strategic transactions and invested approximately $37 million to build out our operations. $46 million alone was spent in the fourth quarter of  2018. $22 million was invested in its subsidiaries and $15 million advanced to our managed entities to facilitate build-outs outs in the year.

 

Balance Sheet

According to the company’s presentation,  Acreage has $105 million in cash and cash equivalents and $149 million of highly liquid short-term investments on hand as of Q4’18, compared to $16M of cash as of Q4’17. The company raised $314M from pre-RTO private placement; completed RTO and listed on the Canadian Securities Exchange. Acreage President George Allen said at this time the company doesn’t anticipate raising more money.

Kanna Acquisition

Acreage also announced it was acquiring Kanna, Inc. which holds a license to operate a cannabis dispensary in Oakland, CA. as the company enters the California market. It’s an all-stock deal valued at $11.5 million that is expected to close in the second quarter of 2019. That’s a bargain when one considers that a nearby dispensary is doing $40 million a year.

Acreage said it will issue up to 460,000 Subordinate Voting Shares at a deemed value of $25 per share. Shares are currently trading in the mid-teens, but Allen pointed out that when the company did go public it was at $25 a share. “It’s a message to our shareholders, that we’re not willing to dilute ad nauseum shareholder value,” said Allen.

“I could not be more excited about our first dispensary operation in California, especially one in a limited competitive market. While this is our first, it is nowhere near our last, as we expect to significantly expand our dispensary footprint in the state over the coming months,” said Kevin Murphy, Founder, Chairman, and Chief Executive Officer of Acreage Holdings, Inc. According to the statement, Oakland allows just 16 adult use dispensaries to serve a population of more than 400,000.

The dispensary is located at 2019 MacArthur Blvd., in Oakland, but it will open in the second quarter of 2019, under Acreage’s dispensary brand The Botanist.

 

 


Debra BorchardtDebra BorchardtMarch 13, 2019
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4min3330

HEXO Corp. (TSX: HEXO) (NYSE: HEXO) is acquiring  Newstrike Brands Ltd. (TSX-V: HIP) in an all-stock deal valued at approximately $263 million. Newstrike shareholders will receive 0.06332 of a HEXO common share in exchange for each Newstrike common share held. There is a $7.5 million termination fee.

Newstrike is the parent company of Up Cannabis Inc., a licensed producer of cannabis that is licensed to both cultivate and sell cannabis in all acceptable forms. Newstrike, through Up Cannabis and together with select strategic partners, including Canada’s iconic musicians The Tragically Hip, is developing a diverse network of high-quality cannabis brands

“We’re thrilled to welcome the Newstrike team into the HEXO family.  Jay Wilgar, CEO of Newstrike and his team have built incredible relationships, including teaming up with The Tragically Hip, and they share HEXO’s vision of bringing exceptional branded cannabis experiences to adults everywhere,” said Sebastien St-Louis, CEO, and co-founder of HEXO Corp. “With Newstrike, we’re adding talented employees and infrastructure to take HEXO to the next level on our journey to become one of the largest cannabis companies in the world.”

Based on the completion of this acquisition, HEXO estimates that for fiscal 2020 the net and gross revenues from the sale of cannabis in Canada will be in excess of $400 million and $479 million respectively.

“This is the most compelling combination we see in the Canadian cannabis sector.  Our strength in Ontario and English Canada clearly complements HEXO’s strong position in Quebec and creates an industry leader.  The combination will deliver meaningful synergies, a stronger financial position with increased flexibility, and will position the combined company to meet growing consumer demand on a national basis. I believe this transaction is beneficial to our shareholders, customers, and employees. We look forward to working closely with the leadership team to complete this transaction,” added Jay Wilgar, CEO of Newstrike.

According to the company statement, the acquisition highlights include:

  • Capacity boost with state-of-the-art cultivation infrastructure: The Transaction gives HEXO the capacity to produce approximately 150,000 kg of high-quality cannabis annually. The Transaction also provides HEXO access to four cutting-edge production campuses totaling close to 1.8 million sq. ft. of near-term cultivation space and diversified growing and production techniques.  This is in addition to HEXO’s 579,000 sq. ft. facility for a manufacturing and product development center of excellence in Belleville, Ontario.
  • Diversified domestic market penetration: Combined, HEXO, and Newstrike have established distribution agreements in 8 provinces including Ontario, Quebec, British Columbia, Alberta, Saskatchewan, Manitoba, Nova Scotia, and Prince Edward Island, allowing broad consumer access to HEXO’s products across Canada.
  • Premium indoor facility: Newstrike’s licensed indoor facility provides HEXO with access to diversified growing techniques and positions HEXO for flexibility for international exports as global cannabis markets continue to open.
  • Accretive synergies: The combined entity is estimated to realize annual synergies of $10 million, allowing HEXO to operate more efficiently with a commitment to continued excellence.

Debra BorchardtDebra BorchardtMarch 11, 2019
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8min3980

Harvest Health & Recreation, Inc. (CSE: HARVOTCQX: HRVSF) has entered into an agreement to buy  VeranoHoldings, LLC in an all-stock deal valued at approximately USD $850 million based on a share price of C$8.79. Harvest Health stock jumped over 15% on the news to lately trade at C$9.56. The deal is expected to close in the first half of 2019 and comes with a $20 million termination fee.

If this deal is completed, the combined company will be one of the largest multi-state operators (MSO’s) in the U.S., as measured by licenses held and facilities permitted. Harvest will hold licenses that will allow it to operate up to 200 facilities in 16 states and territories across the country, including 123 retail dispensaries. Harvest Health was founded in 2011 and currently owns licenses for more than 140 facilities in the U.S. It is often ranked as the third largest cultivator.

“The combination with Verano fits perfectly with our vision of creating the world’s most valuable cannabis company,” said Jason Vedadi, Executive Chairman of Harvest.  “We are confident that this is an opportunity to continue to leverage each of our company’s strengths and drive continued shareholder value, while at the same time achieving the scale we know will give us a leadership position in one of the largest cannabis markets in the world.”

The newly combined company plans to continue hubs of operation in both Arizona and Illinois and merge key leadership talent.  Both companies have recently attracted management expertise across consumer-packaged-goods, beverage, spirits, logistics, branding, horticulture, and extraction technologies from some of the largest most influential companies in the world, all supporting the companies’ explosive growth.

“This is a natural match between like-minded entrepreneurs who have built our companies from the initial facilities into two of the largest MSOs in the U.S, with an unwavering focus on operational excellence, superior quality products and service, and delivering value to customers and shareholders,” said George Archos, Verano Co-founder, and CEO. “Our growth and unique positioning in key markets allowed us to evaluate some of the largest players in the space, but we only had one unanimous choice for a major transaction and that was Harvest.”

According to the company statement, Harvest’s planned acquisition of Verano will include:

·      Licenses and operations in 11 states and territories, including seven cultivation licenses, 37 retail licenses and potential to reach 150+ million Americans;

·      Vertically integrated, cash-flow positive operations;

·      Proven executive team with retail, manufacturing, branding, logistics and operational experience and 300 employees.  Hiring for approximately 300 new positions in 2019 with a focus on hiring minorities, women and veterans;

·      Game changing ethanol extraction technology at pharmaceutical grade levels providing new market opportunities for cannabis biotech, food, and beverage verticals;

·      Portfolio of premium proprietary brands with 150 + product SKUs sold in 150 + retail locations;

·      Total cultivation expansion capacity of 900,000 sq. ft in Illinois, Nevada & Maryland;

·      Ownership of an interest in nine Zen Leaf™ dispensaries with average annual revenues 2.5x higher than retail cannabis industry averages;

“Verano has been creating a brighter way for cannabis production, products and health and wellness by assembling a stellar team of experts drawn from the cannabis industry and the top echelons of Fortune 500 corporations,” noted Sam Dorf, Verano Co-founder and Chief Growth Officer.  “We are excited to join forces with Harvest to leverage each of our strengths to share the benefits of cannabis in innovative new ways with an ever-increasing customer base.  Verano and Harvest independently have always focused on business fundamentals to drive year over year growth in both revenue and EBITDA.  Together, we expect to accelerate that momentum and raise the bar even higher for the industry.”


Debra BorchardtDebra BorchardtFebruary 27, 2019
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4min6650

Curaleaf Holdings, Inc. (CSE: CURA) (OTCQX: CURLF) signed a definitive deal to buy California-based Eureka Investment Partners, LLC. Eureka operates a cultivation facility in the Salinas Valley and is developing three dispensaries across the state. The deal is valued at $30.5 million, of which $10 million is to be paid in cash, $20.5 million in Curaleaf stock, with a potential added bonus to be paid if certain goals are met. The deal is expected to close in March 2019.

By making this acquisition, Curaleaf will gain access to California’s wholesale market through an existing 110,000 sq. ft. greenhouse facility in Salinas, California, with the potential to expand up to 270,000 sq. ft. that could generate over 50,000 pounds of dry flower per year at full scale. The company said that during the fourth quarter of 2018, Eureka harvested over 2,500 pounds of flower and distributed pre-rolls and dry flower under the brand Monterey Kush.  Curaleaf is expected to launch its retail network in California in the second half of 2019. The planned launch of Eureka’s three premium locations will be in Long Beach, Salinas and Monterey County.

“The Eureka transaction represents a significant milestone for Curaleaf, enabling us to enter the highly attractive California market with a cultivation platform that we intend to use for state-wide product distribution,” said Joseph Lusardi, CEO of Curaleaf. “The planned launch of three dispensaries is a platform investment for Curaleaf’s retail expansion strategy to eventually cover the state, which is the largest market for cannabis consumption in the country.  With established vertically integrated operations, Curaleaf is ready to capitalize on the considerable market opportunity in California.”

Choom

Canadian-based Choom Holdings Inc. (CSE: CHOO) (OTCQB: CHOOF) also announced an acquisition on Wednesday. The company said that it had entered into a deal to buy Clarity Cannabis MD Holdings. The agreement includes 30 retail locations, three of which are licensed with the Alberta Gaming, Liquor & Cannabis Commission (AGLC). Choom will issue 8,867,000 Choom Shares and pay $2.5 million to the principal in connection with the acquisition.

“We are thrilled to welcome Clarity into the Choom brands portfolio through this acquisition,” states Chris Bogart, President & CEO of Choom. “Clarity has been successfully operating in Alberta since December and has submitted applications across the province. This transaction gives us a strong foothold in the Alberta retail landscape.  Moving forward we will be working diligently to maximize our retail footprint Canada wide, and this transaction helps us to achieve that goal.”

Choom said that Clarity has successfully progressed through AGLC licensing and is operating three stores in the legal adult use cannabis market in Alberta. They are High River, Cold Lake, and Red Deer. Clarity currently has 11 development permits awaiting construction, with 6 stores to commence construction, and 9 stores completed construction.

In November, Choom received a C$20 million investment from Aurora Cannabis (ACB). No doubt that investment helped fund this acquisition.


William SumnerWilliam SumnerFebruary 12, 2019
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3min7800

Yesterday, the San Francisco-based cannabis dispensary chain, The Apothecarium, announced that they had been acquired by TerrAscend Corp. (CSE: TER) for $118.4 million in cash and stock. Including in the purchase agreement are three retail dispensaries in San Francisco; one vertically integrated cannabis operation which includes cultivation, edibles manufacturing, and a retail dispensary location; and the edibles brand Valhalla Confections.

With more than 200 employees and $45 million in combined revenue, Apothecarium made for an attractive buy to TerrAscend, which recently has been making moves to enter the U.S. market.

Last month, TerrAscend completed the acquisition of another U.S. company Grander Distribution, LLC. Grander is a producer and distributor of hemp-based wellness products that are available in more than 10,000 worldwide retail locations.

“Teaming up with a larger company means that we will be able to bring the Apothecarium dispensary experience to more people, in more cities around the country,” said Apothecarium CEO Ryan Hudson in a statement. “Our customers won’t see major changes inside our dispensaries.”

Under the agreement, TerrAscend has agreed to pay $73.7 million in cash and to grant 7.325 million proportionate voting shares in the company. All full-time employees, including budtenders, will receive shares of TerrAscend.

Additionally, Apothecarium’s CEO and leadership team are expected to remain in their current roles. The completion of this acquisition is still pending regulatory approval from both the states of California and Nevada.

“Today’s news is another major step in executing TerrAscend’s US strategy,” said TerrAscend President Matthew Johnson. “We believe The Apothecarium is the model for operational excellence and will set the tone for our US cultivation and retail expansion, and we admire their philanthropic dedication and local community engagement.  We look forward to working together with the members of the current team to bring the Apothecarium’s unique experience to more communities and improve patient access to quality cannabis products and services.”


Debra BorchardtDebra BorchardtJanuary 22, 2019
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3min2840

Tilray, Inc. (TLRY) has entered into an agreement to acquire all of the issued and outstanding securities of cannabis cultivator Natura Naturals Holdings Inc. in a deal valued at $35 million, but could ultimately grow to $70 million.

Under the terms of the agreement, Tilray will deliver C$35 million at closing. This will be made up of C$15 million in cash and C$20 million in Tilray Class 2 common stock. The statement said that if  Natura reaches certain quarterly production milestones over the following twelve-month period, up to C$35 million of Tilray common stock may become payable resulting in a total purchase price of C$70 million if fully achieved.

Based in Leamington, Ontario, Natura operates a 662,000 sq ft licensed greenhouse that was undergoing a phased conversion and retrofit that was expected to bring up to 15,000 kg of annualized cannabis production online in 2018. Once completed in 2019, the facility is expected to bring total annualized cannabis production capacity to approximately 70,000 kg per year.

Last July, Emblem Corp. (OTC: EMMBF) had planned to acquire Natura in a deal with a potential value of $76 million. By September though the deal fell apart and the agreement was terminated. Emblem had actually advanced Natura C$2 million for the expansion of its facility.

“We’re very pleased to have an agreement in place that allows us to expand our capacity to supply high-quality branded cannabis products to the Canadian market,” said Brendan Kennedy, Tilray President, and CEO. “Through an extensive and thorough search for the right supply partner, we’re pleased to have come to a mutually-beneficial agreement with Natura.”

If this deal is completed, Tilray will obtain Natura’s 662,000 square-foot greenhouse cultivation facility, of which 155,000 square-feet is currently licensed, and all subsequent cannabis output from this facility. Natura, through a wholly-owned subsidiary located in Leamington, Ontario, is a licensed cultivator under the Cannabis Act specializing in the greenhouse cultivation of cannabis.


Debra BorchardtDebra BorchardtJanuary 14, 2019
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4min4260

Aurora Cannabis Inc.  (TSX: ACB) (NYSE: ACB)  entered into a letter of intent to acquire all the issued and outstanding shares of privately held Whistler Medical Marijuana Corporation in an all-stock deal valued at up to approximately $175 million, including certain milestone payments.

Whistler has developed one of Canada’s organic certified BC bud. The acquisition is sure to set the company up to compete with The Green Organic Dutchman (CSE: TGOD) by providing Aurora with a premium organic certified product suite. Whistler said it has differentiated large-scale cold-water extraction technology and processes, creating a full suite of organic certified oil products (including THCA, CBG, and high CBD oils).

“This transaction adds an iconic, organic certified BC-based brand with exceptional traction and a significant price premium in both the medical and retail markets,” said Terry Booth, CEO of Aurora. “We intend to accelerate the completion of Whistler’s Pemberton expansion project and leverage our domestic and international distribution channels to increase market reach for their exceptional products.”

According to the company statement, Whistler operates two indoor licensed production facilities, with its first located in Whistler, British Columbia, and the second, a recently licensed, purpose-built, state-of-the-art facility located a 20-minute drive from the Whistler facility. Once the second facility reaches full capacity (anticipated for Summer 2019) the facilities are anticipated to have a combined production capacity of over 5,000 kg per year. Whistler sells medical cannabis derivatives internationally to both Australia and the Cayman Islands, and through the addition of Aurora’s deep experience in completing EU GMP certified facilities and its large global distribution network, Aurora plans to pursue additional international export opportunities.

Christopher Pelz, CEO, and Founder of Whistler said, “With its commitment to the highest product quality standards, as well as its large footprint in both the Canadian and international cannabis markets, Aurora is the ideal partner for Whistler to enhance our growth and margin profile. We feel there is a strong cultural fit, and believe that Aurora is the right home for us to maintain our organic craft cultivation identity while being able to leverage the resources and capabilities of a large and rapidly growing global company.”

Another reason Aurora may be willing to buy Whistler is that it has “achieved positive cash flow since 2015, with EBITDA margins in excess of 30%. By ensuring consistency, quality, and maintaining its organic commitment, Whistler has achieved average selling prices in excess of 50% greater than the average Canadian medical market, and maintains a similar premium to provinces for adult-use.”



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