Mergers and acquisitions: Company receives $10M termination fee

A medical marijuana grower in Aylmer has been paid $10 million after it was pushed aside in a business deal. In terms of mergers and acquisitions deals, the Ontario grower was set to merge with a larger foreign company in what would have been a $240-million deal. The other company inked a deal with the nation's biggest grower instead.

WeedMD's stock tumbled down 16 per cent as a result of the axed deal with Hiku Brands Co. Ltd., but its CEO says there's no real fallout from the deal bust and that mergers and acquisitions can be distracting if they're allowed to be. He said the company will move forward and is happy with the $10 million termination fee paid. The company has been housing its grow op in an 8,000-square-metre former tobacco facility in Aylmer.

WeedMD recently signed a contract with Shoppers Drug Mart to become the smallest company to partner with the pharmacy chain. Meanwhile, Smith Falls' Canopy Growth Corp. will acquire Hiku in a stock deal worth $250 million. Canopy has a presence across Canada and it eight other countries.

With recreational marijuana use becoming legal in Canada this October, mergers and acquisitions have been heating up the business world across the nation. These types of business ventures can be exciting but also complex and sometimes confusing. An Ontario lawyer might be able to provide some clarity into the legalities that come with forming these new alliances and partnerships. Business owners considering a merger or acquisition might do well to obtain legal representation to ensure that the transactions comply with all applicable laws and are structured in the most advantageous manner. 

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