Aphria (TSX:APH; OTCQB:APHQF) announced on Thursday (February 1) it might be willing to part ways with its assets in the U.S. cannabis market, after months of being embroiled with regulators on the legality of these.
Aphria announced it is actively looking to eliminate their position in the U.S. market. According to their announcement, Aphria is considering “strategic alternatives” to their interests below the Canadian border, “including the possible divestiture of its investments to strategic, long-term and committed investors in the cannabis industry.”
The company holds a subsidiary based in Arizona, cannabis producer Copperstate. According to a report from The Globe and Mail, Aphria plans to sell its stake to Liberty Health Sciences (CSE:LHS) a cannabis operator, which launched with the support of Aphria.
“The two sides have all but agreed on a price, Mr. Neufeld says, but the transaction has not yet been finalized and requires final approval from the controlling shareholders of Copperstate,” The Globe and Mail wrote.
According to the report, Aphria is looking to also sell nearly 25 percent of their stake in Liberty Health.
“To realign things makes so much sense, to move into good hands our Liberty shares and get out of the cloud that the TSX has casted on many of us with U.S. assets,” Neufeld told The Globe and Mail.
TMX announced it would dispute Canadian cannabis companies with US interests
Last year the TMX Group, which oversees the Toronto Stock Exchange (TSX) and TSX Venture Exchange issued a notice to staff announcing it planned to stop Canadian companies from holding assets or be directly involved with operations in the U.S.
When the notice was sent Vic Neufeld, CEO of Aphria, issued a statement saying the notice was “extremely broad” and didn’t properly see the context needed for the split between federal and state laws.
Since the original notice, TMX Group and Aphria have gone back and forth on the issue. Now it appears Aphria is willing to concede to the request from the Canadian exchange.
Aphria is one of the biggest Canadian cannabis licensed producers (LPs) in the public market, and as such, it looked for ways to expand its reach. The market in the U.S. has been promised to be one of the biggest available for companies in this space.
However, on a federal level marijuana is still an illegal substance, causing Canadian exchange regulators to be particularly careful of the companies listed there.
In January the option for Canadian companies to look for options in the U.S. took another hit after Attorney General Jeff Sessions rescinded the Obama-era guidance that allowed states to states to police the legal use of marijuana.
Experts had kept a close eye on the development of this case as it would determine the possibility of Canadian companies being able to invest and look for interests in the growing U.S. market.
Clearly, the TMX isn’t backing down and has now caused one of the biggest LPs to seek a reduction of their presence in the American cannabis market.
Aphria closed on Thursday with a 12.39 percent decrease, and while this announcement may have played a part in this reduction, the entire industry suffered a downsize from a market correction. Liberty Health finished the trading day with a 14.77 percent drop in its share price.
Don’t forget to follow us @INN_Cannabis for real-time news updates!
Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
CanBud Distribution Corporation Closes 2M Second and Final Tranche of its Oversubscribed Private Placement Offering
CanBud Distribution Corporation (CSE: CBDX) (FSE: CD0) (“CanBud” or the “Corporation”) is pleased to announce that it has closed the final tranche of its oversubscribed non-brokered private placement for aggregate gross proceeds of approximately $4,730,000 (the “Offering”).
The Corporation issued a combined total of 39,409,346 units (each a “Unit“) at price of $0.12 per Unit, with each Unit comprised of one common share in the capital of the Corporation (each a “Common Share“) and one common share purchase warrant (each a “Warrant“). Each Warrant entitles the holder to purchase one additional Common Share at an exercise price of $0.22 within 24 months of the closing of the Offering (the “Warrant Term“), provided, however that if the closing price of the Common Shares on the Canadian Securities Exchange (the “CSE“) (or any such other stock exchange in Canada as the Common Shares may trade at the applicable time) is $0.25 or greater per Common Share for a period of five (5) consecutive trading days at any time after the closing date of the Offering, the Corporation may accelerate the Warrant Term such that the Warrants shall expire on the date which is 30 days following the date a press release is issued by the Corporation announcing the reduced warrant terms.
Thoughtful Brands Inc. (CSE:TBI)(FSE:1WZ1)(OTCQB:PEMTF) (the “Company” or “Thoughtful Brands) announces that the letter of intent with Franchise Cannabis Corp. (“FCC”), previously announced in January, has been terminated. The previously announced European joint venture with FCC will continue and allow the Company to launch and tailor its products to European consumer demands
In connection with termination of the merger transaction with FCC, the Company has agreed to pay FCC $100,000 in cash and to issue FCC 5,000,000 common shares of the Company at a deemed value of $0.05 per share. The common shares will be subject to a four-month-and-one-day statutory hold period in accordance with applicable securities laws.
Mergers and acquisitions (M&A) in cannabis space have helped boost the industry to new levels.
Strategic sale of non-core assets by Lobe adds non-dilutive capital and shareholder value
Lobe Sciences Ltd. (CSE: LOBE) (OTC Pink: GTSIF) (“Lobe” or the “Company”) is pleased to announce, further to its press release dated February 23, 2021, that it has completed the sale to Ionic Brands Corp. (“Ionic Brands”) of Lobe’s non-core cannabis assets relating to Washington-based Cowlitz County Cannabis Cultivation Inc. (“Cowlitz”) held by Lobe’s subsidiary vendor, Green Star Biosciences Inc. (the “Transaction”).
Seattle Area Grocery Chain Metropolitan Market to Begin Carrying KOIOS and Fit Soda on March 22, 2021
Adding to its existing presence on the west coast of the United States, all five KOIOS™ flavours and all four Fit Soda™ flavours will be carried in Metropolitan Market stores beginning on Monday, March 22, 2021. Serving the Seattle-Tacoma area (population 3.87 million), Metropolitan Market is one of five chains under its parent firm Good Food Holdings, which has a total of 51 stores in California, Oregon, and Washington State.
Koios Beverage Corp. (CSE: KBEV; OTC: KBEVF) (the “Company” or “Koios”) is pleased to announce that beginning on Monday, March 22, 2021, Koios’ entire line of canned beverage products will be sold at all locations of Metropolitan Market, an urban format supermarket chain in the Seattle-Tacoma area of Washington State. In Q1 2021, the Company announced multiple placements of its beverage products with regional grocers in markets on the west coast of the United States including Market of Choice in Oregon Jensen’s in Southern California and major natural grocery chain Sprouts Farmers Market which has a substantial west coast presence with over one third of its locations (360+ stores across 23 states) in California as well as Washington State 1 . The Company has also recently announced other developments relating to its expansion efforts being undertaken in 2021 such as an in-house beverage canning facility and distribution agreements with regional and national wholesale partners.