With the legalization of cannabis on the horizon, the pot business seems to be smoking. So far in 2018, that business has lit up the mergers and acquisitions sector of the market in Canada, and experts say they don't foresee any slow down. One of the biggest deals happened between the west and east.
Aurora Cannabis Inc. out of Alberta recently grabbed up 17.62 per cent of Ontario's medical marijuana producer, The Green Organic Dutchman Holdings Ltd. (TGOD). The deal gives Aurora first dibs on purchasing 20 per cent of TGOD's yearly weed crop. Aurora also put pen to paper recently for a Denmark-based business deal.
In relation to its initial hostile takeover bid of CanniMed Therapeutics Inc., Aurora recently announced that its investment in the company is now hovering at 2.7 per cent. The offer makes CanniMed's stocks valued at nearly $600 million. CanniMed, however, would rather acquire Newstrike Resources Ltd. -- another Ontario cannabis outfit. Shareholders of the companies Aurora is interested in will soon vote on the proposed deals.
In other cannabis news, Emerald Health Therapeutics Inc., a British Columbia company with a medical marijuana production license, said an unnamed Canadian investor has said it wants to purchase $25 million of its stock. Aphira Inc., of Ontario also inked a $115 million share offering deal that is expected to reinforce its production and offerings. The Canadian cannabis oil producer Golden Leaf Holdings Ltd. closed its purchase of a cannabis consulting firm, shelling out $5 million in stock for the acquisition.
The world of mergers and acquisitions in Canada isn't an always easy one to understand. Company owners curious about the legalities of possible deals might do well to get legal counsel from lawyers with a solid background in these business endeavours. It is prudent to get the legal facts before moving forward with any acquisitions or mergers.
Source: financialpost.com, "Cannabis sector deal-making already off to a hot start in 2018", Geoff Zochodne, Jan. 8, 2018