As investors continue to prioritize cannabis opportunities in the US, market watchers expect mergers and acquisitions (M&A) to play a role in the future for Canadian companies.
A consolidation trend has been expected in the Canadian cannabis space for some time now based on the size of the market compared to the number of operations in the country.
With a recently renewed financial boost and two significant deals among major players in the country, M&A looks set to bring in a new order for Canadian cannabis.
Meanwhile, as Canadian companies wait for policy changes below the border, M&A may help them position ahead of changes in the American legal landscape.
Recent deals push consolidation trend for Canadian M&A
Heading into 2020, a pattern of consolidation was expected for Canadian cannabis operators. However, complications from the financial uncertainty caused by the COVID-19 pandemic likely affected plans.
The latter half of 2020 and the start of 2021 brought some newfound momentum for cannabis investments; this came alongside serious developments in the Canadian marketplace that boosted the performance of operators, according to Nawan Butt, portfolio manager with Purpose Investments.
The deal sent waves across the cannabis investing landscape as it combined two of the biggest names in the public markets, resulting in a company worth approximately C$5 billion.
Butt told the Investing News Network (INN) that the Aphria and Tilray deal was a great opportunity for each company to fill the other’s weak spots. “A great merger of equals, I would say,” he said.
Following confirmation of the transaction, Som Seif, founder and CEO of Purpose Financial, said the deal was a starting point for more consolidation in the Canadian cannabis space.
“Canadian licensed producers (LPs) have been given a second lifeline of sorts here where the capital markets are back to support them and their balance sheets and put them back into growth mode,” Butt told INN.
What are Canadian companies looking for in M&A right now?
Narbe Alexandrian, CEO of RIV Capital (TSX:RIV,OTC Pink:CNPOF), formerly known as Canopy Rivers, told INN that just over two years after federal cannabis legalization in Canada there has been a critical evolution in terms of how deals are valued.
“At the time, when legalization was taking shape, it was always a race towards who had the most supply,” he said. “Fast forward to now, we’ve noticed that it’s not about who has the infrastructure, it’s about who has the eyeballs, who has the demand, who can capture that demand.”
The executive explained that this shift in how the market approaches valuation has led to a renaissance in Canadian cannabis by way of a multitude of companies seeking a reset button of sorts.
“That reset button could be bankruptcy, or it could be a fire sale of the asset,” he said.
The bigger names in the space have also faced difficulties in a changing financial landscape, and Alexandrian said that for the most part they will likely stop trying to do everything. As a result, he explained, there will be a need for other cannabis companies to fill the gaps left open.
The Valens Company (TSXV:VLNS,OTCQX:VLNCF) President Jeff Fallows agreed with Alexandrian. In a conversation with INN, the executive said M&A strategy has been directly impacted by a shift in the style of executive leadership at the top of the Canadian cannabis space.
“You’re seeing more and more jettisoning of things that are not core (to the big producers), and Valens has been a particular benefactor of that,” he said. Valens specializes in extraction services and has even moved forward with its own line of products, such as vape pens.
Fallows explained that in meetings with newer management teams at LPs, he hears them ask, ‘Why am I doing vape pens?’ and instead they elect to pursue a partnership.
“(It’s) very good from the Valens perspective, but I think (it is) symbolic of the growing up and the evolving of the cannabis sector as a CPG sector,” Fallows said.
Butt has argued that the Canadian market will reach a point where a controlling top of leading companies holds a dominant majority position in the domestic market.
While the green rush of cannabis investment initially led to an explosion of companies and investment avenues, the expert thinks it’s most likely the market will end up with a reduced number of operators.
“What I anticipate for us to start seeing more often is more mergers between tier one and tier two players,” Butt said, classifying the types of Canadian cannabis companies out there.
He warned that none of the future deals that may come into play will be focused on infrastructure or capacity options.
“Nobody wants to buy capacity right now,” said Butt. “What is worth value is brands, relationships, innovative product formats and international exposures.”
Canadians pine for US entry points
One aspect all experts can agree on is the way the US marketplace has affected the path of expansion for Canadian companies.
Canadian firms have entered the US market through strategic investments or expansions with CBD derivative options, which are legally permitted thanks to hemp-derived CBD permissions in the country.
“We anticipate there will be further mergers of sorts going into this year, especially in anticipation of the US opportunity opening up for Canadian LPs,” Butt told INN.
Those business opportunities, however, do not represent medical or recreational cannabis product sales in the fractured state markets. That avenue has been entirely dominated by US-based multi-state operators (MSOs).
“US cannabis companies are now hitting a level of maturity where real business models are emerging,” Joe Bayern, CEO of Curaleaf Holdings (CSE:CURA,OTCQX:CURLF), told S&P Global Market Intelligence.
The growth cycle afforded by the value size available from US cannabis businesses has shifted the attention of Canadian companies with enough financial options to pursue a run below the border.
“Investors are speculating that Canadian cannabis companies will be able to access that market in the near future,” Butt said.
While the desire is present, and the Canadians are starting to talk more openly about their intentions with the US market, the legal framework makes things murky in terms of the approach possible.
“We believe that the Canadian LPs and the potential positioning of entry into the US market is too early,” Charles Taerk, president and CEO of Faircourt Asset Management, commented to INN. “And so all of this structuring, raising capital and the craze in the Canadian LPs, market prices, raising more than the MSOs — (it) doesn’t make a lot of sense to us.”
Taerk explained that from his view cannabis policy in the US has moved at a glacial pace in the past, and that will not change despite the country’s new Democratic political leadership.
“There is great exuberance with respect to the Democrats controlling the Senate,” he said. But according to the financial executive, the current administration has bigger fish to fry right now in terms of policy.
“We believe that there is going to be some type of legislation and it will be tabled. But we don’t think that federal legalization is in the cards, at least this year,” Taerk said.
Dan Ahrens, chief operating officer and portfolio manager at AdvisorShares, told INN the Canadian companies find themselves in a tricky position regarding the US growth opportunity.
“I think that’s one of the most interesting stories still, that disconnect between Canada and the US. For the cannabis operators in Canada, they have no choice but to speak about entry into the US,” he said.
Ahrens told INN Canadian cannabis companies will try everything possible to secure a stake in the US marketplace; some even already have viable access points ready in the case of future policy changes.
“The US operators are going to look extremely tantalizing to Canadian firms, to other US firms and to other US or worldwide CPG companies,” said Ahrens, who manages the AdvisorShares Pure Cannabis ETF (ARCA:YOLO) and the recently launched AdvisorShares Pure US Cannabis ETF (ARCA:MSOS).
Despite the potential associated with the US marketplace, one financial advisor expressed concern at the current timeline of events starting to surround Canadian companies in relation to US entries.
Ahrens explained that Canadian companies have continued to see trading activity related to US-based developments. “They trade up improperly, I guess is a good way to say it, based on news in the US,” he said. “But it won’t last.”
The future seems uncertain for Canadian cannabis companies, especially in relation to the US marketplace — it remains unclear how the country’s cannabis players will capitalize on the attractive American market. For now, what’s evident is that interest in this potential market will surely drive the possibility of critical cross-border M&A plans.
Don’t forget to follow us @INN_Cannabis for real-time updates!
Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
Ayurcann Holdings Corp. (CSE: AYUR) (the “Company” or “Ayurcann”) an integrated Canadian extraction company specializing in the processing of cannabis and hemp for the production of oils and various derivative products, announces the granting of stock options and restricted share units.
The Company has announced that it has granted incentive stock options to directors, officers, employees and consultants of the Company to purchase an aggregate of 1,000,100 common shares under the Company’s Stock Option Plan. Each option is exercisable at a price of $0.16 per common share, expires three years from the date of grant and vest six months from the date of the grant.
The Company has also granted restricted share unit grants, pursuant to the Company’s Restricted Share Unit plan, dated April 1, 2021, totaling 1,548,875 to certain eligible participants.
For further information, please contact:
Igal Sudman, Chairman, Chief Executive Officer and Corporate Secretary
Ayurcann Holdings Corp.
About Ayurcann Holdings Corp.:
Ayurcann is a leading post-harvest solution provider with a focus on providing and creating custom processes and pharma grade products for the adult use and medical cannabis industry in Canada. Ayurcann is focused on becoming the partner of choice for leading Canadian cannabis brands by providing best-in-class, proprietary services including ethanol extraction, formulation, product development and custom manufacturing.
Neither the Canadian Securities Exchange nor its Regulation Services Provider have reviewed or accept responsibility for the adequacy or accuracy of this release.
News Provided by GlobeNewswire via QuoteMedia
A planned business merger between two leading cannabis producers hit a small delay this week as a critical vote got moved.
Keep reading to find out more cannabis highlights from the past five days.
Tilray delays critical shareholder meeting
On Thursday (April 15), Tilray (NASDAQ:TLRY) announced it will be postponing its shareholder vote on the fate of its merger with Aphria (NASDAQ:APHA,TSX:APHA). It will take place on April 30 instead of April 16.
Neither cannabis company offered an explanation for the change. Tilray has asked shareholders to participate in this vote regardless of how many shares they may hold. “Tilray stockholders who have not already voted, or wish to change their vote, are strongly encouraged to do so,” the company said.
This news came days after Aphria shareholders overwhelmingly voted in favor of the business transaction, with a total of 99.38 percent of shareholders voting for the deal to continue. Confirmation from Aphria Chairman and CEO Irwin Simon indicated the partnership was en route to being complete.
This past week Aphria also released financial results for the third quarter of its 2021 fiscal year, in which the firm highlights the overall direction of the company with the Tilray deal.
“We expect to have a tremendous runway for long-term sustainable growth as we build upon our existing foundation in Canada and internationally by increasing the scale of our global operations,” Simon said in a statement.
Cannabis retailer celebrates digital trend
Bidding for the piece, named “Non-Fungible Toke“ started at a price of C$4.20. The retailer plans to donate the proceeds to two charities, Second Harvest and Less.
The latter is designed to counter the carbon footprint of blockchain technology, a common criticism drawn against the rise of NFTs and other novel technologies.
As of 11:00 a.m. EST on Friday (April 16), the NFT bid was up to C$169.11.
Cannabis company news
- The Valens Company (TSX:VLNS,OTCQX:VLNCF) issued its financial report for the first quarter of its 2021 fiscal year. In its results, the company highlights a net revenue uptick of 24.7 percent from the previous quarter, resulting in C$20 million for the period.
- Trulieve Cannabis (CSE:TRUL,OTCQX:TCNNF) closed a public offering of 5 million subordinate voting shares at a price of C$50 each for total gross proceeds of C$287.5 million. The company celebrated its financial position after an offering in January, which will lead to the pursuit of merger and acquisition targets.
- Australis Capital (CSE:AUSA,OTCQB:AUSAF) appointed Jason Dyck as its new chief science officer and chairman of the firm’s scientific advisory board. Dyck previously served as an executive at Aurora Cannabis (NASDAQ:ACB,TSX:ACB), leading the scientific efforts for the cannabis producer. “I look forward to providing AUSA with advice and direction in its scientific efforts towards bringing innovations to market with immediate and significant commercial appeal,” Dyck said.
- Truss Beverage, a cannabis drinks venture co-owned by Molson Coors Beverage Company (NYSE:TAP,TSX:TPX) and HEXO (NYSE:HEXO,TSX:HEXO), released the details of its new lineup of infused beverages. Six new drinks will become available around the summer and are intended to pair with the season.
Don’t forget to follow us @INN_Cannabis for real-time updates!
Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
Partnerships with Minardi Law , Minorities for Medical Marijuana, CultivatED, and the Georgia Justice Project will include clinics and virtual events across Florida , Georgia , and Massachusetts
Trulieve Cannabis Corp. (CSE: TRUL) (OTCQX: TCNNF) (“Trulieve” or “the Company”), a leading and top-performing cannabis company based in the United States announced today a series of expungment clinics located throughout south and central Florida as well as virtual events in Georgia and Massachusetts . The clinics are part of the Company’s celebration of the 50 th anniversary of 420.
During the month of April, Minardi Law has hosted expungment clinics and will be hosting two more as follows:
- Releaf Patient Appreciation Day, April 17 th ( Valrico )
- First Annual 4/20 Event ( St. Petersburg Beach )
At these clinics, an attorney will be present to review records and see if someone is eligible for a sealing or expungment of their records. As part of the events, Trulieve will be helping cover the costs for finger prints, legal fees, and court costs.
Trulieve is working with Minorities for Medical Marijuana (“M4MM”) to host a 4/20 Expungement Clinic, part of M4MM’s Project Clean Slate. This event will take place on Saturday, April 24, 2021 , from 9:30am – 4:30pm at Riviera Beach City Hall. Anyone seeking to take place in this event is required to register in advance at http://trulieve.cc/expungementpreregistration .
In addition, Trulieve is sponsoring the First Friday Series , a weekly virtual event from the Georgia Justice Project to help Georgia citizens with record restrictions, and is also sponsoring the Fellowship Presentation and Expungement Clinic being offered through CultivateEd and GBLS on Friday, April 23 from 3:00pm – 4:00pm . You can register for the Massachusetts expungement clinic in advance here: HTTPS://BIT.LY/2Q655KK
“Our mission as a company has always been to improve people’s lives,” said Trulieve CEO Kim Rivers . “We’ve always been dedicated to improving the communities we call home. Partnering with Minardi Law , Minorities for Medical Marijuana, Georgia Justice Project and CultivatED on these clinics was a simple decision for us; we encourage anyone seeking help with the expungement process to attend one of these clinics in your own state to start the process.”
For more information about Trulieve and the April expungment clinics, please visit www.Trulieve.com .
Trulieve is primarily a vertically integrated “seed-to-sale” company in the U.S. and is the first and largest fully licensed medical cannabis company in the State of Florida . Trulieve cultivates and produces all of its products in-house and distributes those products to Trulieve-branded stores (dispensaries) throughout the State of Florida , as well as directly to patients via home delivery. Trulieve also has operations in California , Massachusetts , Connecticut and Pennsylvania. Trulieve is listed on the Canadian Securities Exchange under the symbol TRUL and trades on the OTCQX market under the symbol TCNNF.
To learn more about Trulieve, visit www.Trulieve.com .
SOURCE Trulieve Cannabis Corp.
News Provided by PR Newswire via QuoteMedia
Seth Rogen’s New Cannabis Brand are Now Available at Apothecarium Dispensaries in San Francisco , Berkeley and Capitola
The Apothecarium is offering cannabis from Houseplant, the cannabis lifestyle brand founded by Seth Rogen and Evan Goldberg at its five California dispensaries. The Apothecarium has three San Francisco locations (Castro, SOMA and Marina ) and one each in Berkeley and Capitola (outside of Santa Cruz ).
“With the vast number of dispensaries in California , we put a lot of effort into identifying the right ones that align with Houseplant’s values,” said Seth Rogen , Co-Founder of Houseplant. “The Apothecarium shares the same commitment to creating a strong consumer experience that we pride ourselves on and we are thrilled to bring our three initial strains to their stores in the Bay Area.”
Houseplant is launching with three flower strains, all of which will be available at The Apothecarium, including: Diablo Wind (sativa), Pancake Ice (sativa) and Pink Moon (indica). Like their founder’s groundbreaking film “Pineapple Express”, Houseplant strains are named after weather phenomena. Each strain will be sold in a custom tin.
“We are so proud to be one of the very first dispensaries in California to offer Houseplant to our customers,” said Ryan Hudson , CEO and co-founder of The Apothecarium. “Seth, Evan and everyone at Houseplant love and respect cannabis as much as we do. We simply cannot wait to share their beautiful and delicious flowers with our guests.”
“We’ve been working with the Houseplant team for more than a year and are grateful to have a partner that shares so many of our values, including an emphasis on cannabis education, quality, reform of cannabis laws and beautifully designed, recyclable packaging.”
“Seth has been hands-on during the process, spending time with our store managers to make sure they know the products and how much care has gone into vetting and selecting the best strains. We think our guests are going to love Houseplant.”
About The Apothecarium
The Apothecarium is recognized as one of the nation’s premier cannabis dispensaries, with an emphasis on education via in-depth one-on-one consultations from highly trained cannabis consultants. The company was founded by three first cousins and two family friends in 2011. Our dispensaries are known for providing educational events that are open to the public at no cost — and for welcoming seniors, first-time dispensary visitors, and people with serious medical conditions. The Apothecarium’s flagship San Francisco dispensary was named the best-designed dispensary in the country by Architectural Digest . Patients and customers may order at our dispensaries or online for pickup or delivery at apothecarium.com [apothecarium.com] .
The Apothecarium is committed to giving back to the communities we serve. We have donated more than $400,000 in cash to community groups and nonprofits — plus more than $300,000 worth of in-kind donations.
All Apothecarium dispensaries continue to implement safety measures to protect guests and team members. Protocols include strict social distancing inside and outside the dispensaries, a mask requirement for everyone inside the dispensaries, no contact check-in procedures and ongoing sanitizing throughout the day.
CA Licenses: C10-0000523-LIC; C10-0000522-LIC; C10-0000515-LIC, C10-0000738-LIC, C10-0000706-LIC
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MISSISSAUGA, Ontario TheNewswire – April 16, 2021 Sire Bioscience Inc. (CSE:SIRE) (OTC:BLLXF) (FSE:BR1B) (CNSX:SIRE.CN) (“SIRE” or the “Company”) announces that Brian Nugent has resigned as a member of the Company’s board of directors (the “ Board ”). It has been a pleasure and a blessing to have worked with Brian Nugent over the past few years, his business acumen and tremendous experience will certainly be missed, SIRE wishes him nothing but the best in all his future endeavors.
About Sire Bioscience
SIRE is headquartered in Mississauga, Ontario with its wholly owned subsidiary PLANTFUEL® based in Denver, Colorado. SIRE is managed by a group of successful entrepreneurs who have extensive experience in the areas of consumer-packaged goods, manufacturing, logistics, and distribution. SIRE is a CPG life science company focused on the plant-based foods and supplements industry.
For additional information contact:
Sire Bioscience Inc.
Copyright (c) 2021 TheNewswire – All rights reserved.
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