It was a game-changing week for the privately-owned premium app-controlled vaporization technology and devices producer, Pax Labs Inc, after the company announced new partnerships with the Supreme Cannabis Company (TSX: FIRE) and OrganiGram Holdings (NASDAQ:OGI).
The first agreement will see Supreme Cannabis become a foundational brand partner and supplier in Canada, pending the federal legalization of the vaporizable products. Through this partnership, Supreme Cannabis' wholly-owned subsidiary, 7ACRES, becomes one of only four licensed producers chosen as initial partners to create cannabis oil pods for the PAX Era.
"Supreme Cannabis is excited to be partnering with PAX to provide consumers with the ultimate vaporizing experience. Together, we expect to deliver 7ACRES' multi-award winning flower extracted into oils exclusively for use in North America's best-selling premium vaporizer, the PAX Era."
– CEO of Supreme Cannabis, Navdeep Dhaliwal
PAX has also chosen to partner with Organigram, which will see the company produce and fill Edison Cannabis Company-branded pods specifically for the launch of the PAX Era platform.
Organigram plans to work with and offer Edison Cannabis Co.-branded PAX Era pods to all 10 of its provincial partners to achieve coast to coast distribution.
The pods will be filled onsite at Organigram's Moncton facility at the Company's Phase 5 refurbishment. All sales and distribution will be subject to and in accordance with legislation related to extractable products in Canada.
MedMen Enterprises Inc (CSE: MMEN) announced that it has signed a definitive agreement to acquire a 100% stake in MattnJeremy, Inc. LLC d/b/a One Love Beach Club ("One Love"). The acquisition further enhances MedMen's industry-leading California footprint, adding a premier location strategically located between its Santa Ana and LAX locations.
One Love is currently on a run-rate of approximately $6 million in unaudited gross revenue with an unaudited EBITDA margin of approximately 29%.1. The company will pay $13 million, of which $10 million will be satisfied in Class B Subordinate voting shares, $1 million in cash at closing and $2 million in deferred cash.
The transaction is subject to regulatory approvals by local and state authorities and other customary closing conditions. The company expects the transaction to close within 45 days.
"We're excited to welcome Long Beach to the MedMen family and continue our growth in the most important cannabis market in the world."
– CEO of MedMen, Adam Bierman
Tilray, Inc (NASDAQ:TLRY), a global leader in cannabis research, cultivation, production, and distribution, today announced that it has signed a non-binding Letter of Intent (LOI) with its largest stockholder Privateer Holdings, Inc for a transaction that will provide for the orderly release of the 75 million Tilray shares to Privateer's equity holders. These shares currently represent 77 percent of Tilray's total shares outstanding.
Under the terms of the LOI, the parties will effect a downstream merger of Privateer with and into a wholly-owned subsidiary of Tilray, with the Tilray subsidiary surviving the merger. All Tilray shares held by Privateer and all outstanding Privateer common stock will be cancelled upon consummation of the merger.
The company also entered into a multi-year agreement with Valens GroWorks Corp (CSE: VGW) to expanded the volume of its extraction services, adding an option to provide contract manufacturing services in an arm's length, binding multi-year agreement with Tilray Inc.
"We are honoured to be recognized by Tilray not only as a leader in the extraction space, but also for our ability to create value through our innovative product development and contract manufacturing services. We anticipate these services will become a significant component of our business as we continue to grow along side our customers."
– CEO of Valens GroWorks Corp, Tyler Robson
Under the initial two-year term of the expanded Agreement, Valens will extract on a fee for service basis a minimum annual quantity of 60,000 kg of dried cannabis and hemp biomass, up 300% from the 15,000kg annual commitment outlined in the original agreement.
In addition, the company may provide contract manufacturing services for tincture bottles and gel caps, with the option to offer contract manufacturing services for other product formats such as vaporizer cartridges and topicals as Health Canada regulations allow.
The CEO of Valens GroWorks, Tyler Robson, said that "this significant expansion of extraction services requested by Tilray is a true demonstration of the industry leading service being provided to our partners."
MPX International Corporation (CSE: MPXI) announced that it had entered into an agreement with First Growth Holdings through which MPXI intends to acquire a 51% interest in First Growth, subject to the completion of due diligence as well as definitive documentation.
First Growth is also applying under the Medicines and Related Substances Act, No. 101 of 1965 for a license to cultivate, manufacture and export cannabis from the Sonop Farm, which is located in the traditional wine-growing region of Stellenbosch in South Africa's Western Cape.
The culmination of this South African joint venture will establish a low-cost jurisdiction in which MPXI will be able to purchase either all or a substantial portion of the cannabis flower and/or extract to support its operations in Canada, Europe and Oceania. Upon First Growth achieving the applicable milestones outlined below, MPXI will issue warrants in MPXI to the current shareholders of First Growth up to an exercise value of US$5,000,000.
"South Africa is currently one of the few countries in Africa that has agricultural standards capable of meeting Good Agricultural Practice standards as defined by the European Union. As well, our partners at First Growth bring to the venture, extensive experience in regional cultivation, packaging and logistics enabling MPXI to quickly bring the venture on-line and ensuring us of a high quality and reliable supply of lower-cost cannabis biomass and extract for our growing global markets."
– President and CEO of MPX International, W. Scott Boyes
Trulieve Cannabis Corp (CSE: TRUL) revealed that it had priced its previously announced public offering of units, comprising an aggregate principal amount of US$70,000,000 of 9.75% senior secured notes maturing in 2024, and an aggregate amount of 1,470,000 subordinate voting share warrants.
The offering is being conducted on a "best-efforts" basis pursuant to the terms of an agency agreement dated June 11, 2019, between the company and Canaccord Genuity Corp. The Company intends to use the net proceeds from the offering for capital expenditures, acquisitions, to repay indebtedness and for general corporate purposes.
It is expected that the Offering will close on or about June 18, 2019, or such other date as the company and Cannaccord agree. Trulieve has made the required filings to list the notes, the warrants and the subordinate voting shares issued on exercise of the warrants. Listing will be subject to the fulfillment of all of the listing requirements for the Canadian Stock Exchange.
Fire & Flower Holdings Corp (TSXV: FAF), announced that the company had achieved a milestone of C$25 million in system sales since opening on October 17, 2018, the date adult-use recreational cannabis became legal in Canada.
Today, the company operates 18 licensed cannabis stores in the provinces of Alberta and Saskatchewan and has licensed two branded shops in the province of Ontario, all through its wholly-owned subsidiary Fire & Flower Inc.
Since adult-use legalization, Fire & Flower has processed more than 375,000 transactions. This level of customer engagement provides Fire & Flower with the ability to gain consumer insights and curate its product assortment to the evolving preferences of consumers.
"As the adult-use cannabis market continues to develop across Canada, this significant sales milestone demonstrates Fire & Flower's ability to open and operate best-in-class retail stores across the country. Our Hifyre digital platform including our Click & Collect service along with our retail experience team have been key drivers in achieving our level of sales."
– Chief Executive Officer of Fire & Flower, Trevor Fencott
Zelda Therapeutics Ltd (ASX:ZLD) gained a new strategic investor in leading boutique investment management group Merchant Funds Management, which has obtained a 3.6% stake in the company. This was facilitated by the sale of 35.5 million shares by Zelda's founder and director Mara Gordon, of which Merchant acquired 26,931,660.
The sale by Gordon represented part of her holding in Zelda and she retains more than 44 million shares while remaining on the company's board.
Following this change in shareholding, the board of Zelda now holds a combined 204,222,646 shares representing 27% of issued capital and remains focused on growing shareholder value.
AusCann Group Holdings Ltd (ASX:AC8)—a substantial shareholder in Canopy Growth Corporation—has lifted its interest in the cannabinoid pharmaceuticals developer to 13.28%. This came about on June 10 when the Ontario, Canada-based investor exercised more than 7.677 million options at 20 cents each for consideration of in excess of $1.535 million.
Canopy, through its Australian subsidiaries – Canopy Growth Australia Pty Ltd, Canopy Growth APAC Holdings Pty Ltd and Canopy Growth Farms Australia Pty Ltd – now holds more than 42 million shares.
Last month the company's new CEO Ido Kanyon took up his new position following a comprehensive international executive search conducted by the board. AusCann remains on track to deliver its hard-shell capsules to the market for clinical trials during 2019. Shares were trading on 13 June at at 36.5 cents, up almost 3% on the previous day's close.
PharmaCielo (TSXV:PCLO) has launched a takeover bid for Creso Pharma (ASX: CPH), which Creso's board endorses, valuing the company at A$122 million. PharmaCielo has a current market cap of C$675 million (A$724 million), and owns Colombia's largest cannabis producer which is fully licenced to manufacture medicinal cannabis oil.
The strategy for the merger is to create a vertically integrated supply chain, with expanded medicinal cannabis product offerings and numerous distribution channels in global markets. Additionally, the merged entity will hold licenced cultivation and processing facilities in both Colombia and Canada.
PharmaCielo proposes to acquire Creso through share and option schemes, which effectively value Creso at A$122 million or A$0.63 per share – representing a 50% premium to Creso's closing share price of A$0.42, as of June 10th. Under the share scheme, Creso's shareholders will receive 0.0775 PharmaCielo shares for each Creso share held.
Once the deal has been completed, Creso shareholders will hold about 13% of the issued capital in the merged entity.
"PharmaCielo's proposed acquisition of Creso harnesses the synergies between us and creates a combined company poised to become a global powerhouse in the medicinal cannabis industry. Upon closing of the transaction, the combined company will quadruple our global footprint with presence in more than a dozen countries spanning North and Latin America, Switzerland, Europe, the Middle East, Australian and New Zealand."
– The CEO of PharmaCielo, David Attard
World Class Extractions Inc (CSE: PUMP) and Quadron Cannatech Corporation (CSE: QCC) announced that the shareholders of Quadron have voted in favour of a special resolution to approve a proposed transaction, pursuant to which, among other things, World Class will acquire all of the issued and outstanding shares of Quadron, by way of a court-approved plan of arrangement.
World Class is also pleased to announce the grant of 300,000 incentive stock options to a business consultant.
The stock options will entitle the holders thereof to acquire one common share of World Class at a price of $0.17 per share, for a period of two years.
Watch this space for future weekly updates.