The week in marijuana deals
Emblem gets fired up, Sundial looks south
After another down week for cannabis stocks, the final hours of trading on Friday saw a flurry of enthusiasm, following news that U.S. President Donald Trump may support efforts to protect states that have already legalized marijuana. The United States Marijuana Index, which tracks 17 publicly listed companies with operations in the U.S., was up 13.7 per cent, while the Canadian Marijuana Index climbed 6.5 per cent.
Friday’s move followed announcements on both sides of the border earlier in the week that point to the increasing normalization of marijuana. In Canada, coffee chain Second Cup announced plans to transform some of its stores into dispensaries, while in the U.S., former top Republican John Boehner announced he’s joining the board of a cannabis company. Here are some marijuana deals from last week you might have missed.
EMBLEM GETS FIRED UP
Emblem Corp. announced a supply agreement with retail-focused Fire & Flower Inc., which has applied for 37 dispensary licences in Alberta. Emblem will be the “preferred supplier” for Fire & Flower for three years, the company said.
“The retail environment will be critical to generating brand awareness, educating the consumer about products and ultimately driving market share for our adult-use brands,” said Emblem chief executive Nick Dean, in a press release.
Due to the closeness of the two companies — Emblem chairman Harvey Shapiro “owns approximately 19.5 per cent of the common shares of Fire & Flower and controls and directs approximately an additional 65 per cent of the common shares through a voting trust” — it appears to be less of a deal and more of a rollout of Emblem’s retail strategy for provinces allowing private dispensaries.
SUNNY DOWN SOUTH
Alberta-based Sundial Growers Inc. entered discussions with Uruguay-based ICC Labs Inc. to import 250 kilograms of “pure cannabidiol crystals” annually, subject to ICC’s facility getting GMP certified and Sundial being granted an ACMPR sales licence. The two companies have also begun discussions on creating new branded products together, ICC said in a press release on Thursday.
“Having production licences in the two low-cost jurisdictions in South America (Uruguay and Colombia) will give us tremendous advantage in supplying highquality cannabinoid products at very competitive prices to Canadian customers,” said ICC chief executive Alejandro Antalich.
ICC, which aims to be a low-cost wholesaler of CBD and hemp, has already signed supply deals with Emblem and Nuuvera Corp. (recently acquired by Aphria Inc. and renamed Aphria International Inc.)
OTHER DEALS
MedReleaf Corp. closed its previously announced acquisition of property in Exeter, Ont., which includes 1 million square feet of existing greenhouse infrastructure and 95 aces of nearby land. MedReleaf is paying $21.5 million in cash and 225,083 in common shares.
Tilray Inc. announced on Friday that it’s signed a recreational cannabis supply agreement with the Yukon Liquor Corp. Tilray will supply the YLC via its newly formed subsidiary, the High Park Company, which holds brands like Marley Naturals and Irisa. The size of the deal wasn’t disclosed. The YLC plans to open one store this year in Whitehorse.
Maricann Group Inc. entered into a definitive agreement to acquire Haxxon AG, a Swiss company with an indoor cultivation facility near Zurich, for roughly $2.6 million in cash and 7.9 million in Maricann shares. The deal was first announced in January and the company says it’s expected to close mid-May.