Newstrike shareholders vote to back acquisition by CanniMed

TORONTO Shareholders of Newstrike Resources Ltd. voted overwhelmingly in favour of an acquisition by licensed cannabis producer CanniMed Therapeutics Inc. at a special meeting Wednesday.

Approximately 99.4 per cent of the votes, representing more than 271.8 million outstanding common shares, were cast in support of a plan that would see Newstrike shareholders receive 33 CanniMed shares for each 1,000 shares of Newstrike.

The Tragically Hip, a major shareholder in Newstrike, last week threw its support behind the company’s friendly takeover bid by Saskatoon-based CanniMed.

However, the deal, which CanniMed says better positions the company for entry into the recreational cannabis market, is subject to approval from CanniMed shareholders at a special meeting scheduled for Jan. 23.

The final outcome of that deal remains uncertain, as CanniMed is also the target of an all-stock hostile takeover by Edmontonbased

Aurora Cannabis that is conditional on abandoning the Newstrike deal.

CanniMed has urged its shareholders to vote in favour of Newstrike, but three of the Saskatoon-based company’s biggest shareholders representing 38 per cent of outstanding shares have signed lock-up agreements backing Aurora’s bid.

Earlier this month, CanniMed signed a deal with Up Cannabis, which is owned by Newstrike, for the supply of raw materials in the face of rising demand as Canada prepares to legalize recreational pot.

CanniMed has filed a $725-million lawsuit as it tries to fend off Aurora’s hostile takeover.