During the month of July the cannabis public markets were hit with a few announcements that changed the course of the upcoming recreational market in Canada.
One of the biggest stories this month was the decision by newly elected Ontario Premier Doug Ford to forego the plan for government monopoly of stores selling recreational cannabis.
Instead it was reported the Ontario government will open the gates for private retailers to set up shop in the coveted Canadian market. The government will still oversee distribution but will now back off the plan to open its own shops. The decision by Ontario’s government rewards many companies with bets on the retail market, seeking to sell consumers directly.
In July B.C. signed the most deals of any province in Canada so far, having signed initial supply agreements with 31 licensed producers for legal cannabis product. The Liquor Distribution Branch for the province signed 24 companies either public or related to a public venture available to investors.
The agreements were signed specifically with these producers since they “responded to the LDB’s request for information process and are able to supply a sufficient volume of non-medical cannabis upon legalization.”
Hiku Brands (CSE:HIKU) announced it would be dropping a proposed merger with WeedMD (TSXV:WMD), in favor for a new acquisition deal from Canopy Growth (TSX:WEED; NYSE:CGC). The shares deal is worth approximately C$250 million. Hiku shareholders will get 0.046 of a Canopy share per Hiku share they own.
Hiku shareholders will obtain a 33 percent premium from the proposed transaction with Canopy from the 20-day volume weighted average prices for the two companies.
On the other hand WeedMD obtained a C$10 million termination fee and CEO Keith Merker said this cash will get the company to a fully funded status for future plans.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Hiku Brands is a client of the Investing News Network. This article is not paid-for content.