It’s time for your Daily Hit of financial cannabis news for June 26, 2018.
On The Site
Microcaps And The M&A Scene
Merger and acquisition activity in the cannabis industry is lit this year. So far in 2018, Viridian Capital reports that there have been 106 public and 26 private M&A deals in the cannabis industry for a total of 132 deals for the week ending June 8. Compare this to only 73 deals for the same time period for 2017 – an increase of 80%.
Cultivation and retail accounted for the most deals made, while the investment sector came in second and infused products & extracts were the third most popular sectors for deals. The smaller companies are trying to compete with a market that is quickly leaving the small caps behind. Canopy Growth (CGC) is the leader in Canadian medical marijuana with a 15% market share according to a new report from Stifel. Aurora Cannabis (ACBFF) is acquiring MedReleaf and that is making them almost an equal player to Canopy. This means that two companies will own a third of the market for medical marijuana in Canada.
In a sign of confidence, Aurora Cannabis Inc. (ACBFF) has agreed to a new C$200 million debt facility, with a potential increase to C$250 million, with the Bank of Montreal. The debt will consist of a $150 million term loan and a $50 million revolving credit facility both of which will mature in 2021.
The debt will be primarily secured by Aurora’s production facilities, including Aurora Sky, Aurora Mountain, and Aurora Vie. Aurora Sky is projected to produce in excess of 100,000 kg per year of high-quality cannabis at low per gram costs and is scheduled to deliver its first harvest this week.
In Other News
Green Spirit Industries Inc.
Green Spirit Industries Inc. (GSRX) said that it has been made aware of recent trading and promotional activity concerning GSRX common stock. The company has been informed that the higher than average trading volume in its stock may be the result of an unauthorized promotional activity. Green Spirit has been informed that emails promoting GSRX were sent out from unreliable sources utilizing a‘@gmx.com’ email domain. The company said it was not aware of this promotional activity.
CannTrust Holdings Inc.
CannTrust Holdings Inc. (TSX: TRST) held the official Grand Opening of its Niagara Perpetual Harvest Facility, the first such facility in Canada. The current annual output from the facility is estimated at 50,000 kilograms. In addition, the company has begun construction of an additional fully funded 600,000 sq. ft. expansion, that when completed, will double CannTrust’s annual capacity to in excess of 100,000 kilograms.
Bahamas Development Corporation
Bahamas Development Corporation (BDCI) subsidiary company Global Consortium, Inc. dba Cannabis Consortium Partners has reached a deal with the building owner to purchase the entire 64,000 sq. ft. building in Northern California for $9 million. The building owner has agreed to hold an interest only note for $4.5 million with a 60-day balloon payment once the current tenant is successfully removed from the space or their lease expires. Based on the amount of rental space available, the ROI for the building purchase is 15 months after rentals begin.
HARDCAR Distribution is excited to announce a newly minted partnership with Axiom Cyber Solutions to protect businesses in the cannabis industry from cyber attacks and the theft of valuable data. New businesses are coming online every day as the cannabis market explodes throughout the United States and Canada, making them prime targets for hackers.
Although HARDCAR Distribution brings years of security experience to the cannabis industry ensuring the safe and secure transport of cash and product, they understand the importance of protecting their clients on every level. With Axiom’s team of infrastructure specialists, developers, database and business intelligence experts, and project managers, growing cannabis businesses now have a full-service solution with the addition of cutting-edge cybersecurity technology.