CanniMed urges province to step in amid hostile takeover bid

Canada’s first licensed medical marijuana company is appealing to the Saskatchewan government as it works to fend off what is thought to be the first hostile takeover attempt in the country’s burgeoning weed business.

In a letter sent to MLAs on Thursday, a copy of which was obtained by Postmedia News, CanniMed Therapeutics Inc.’s president and CEO argued that Aurora Cannabis Inc.’s $550-million bid “sells this province short.”

“We have a better plan: one that will keep jobs in the province, ensures our patients receive quality product when they need it, and generates the kind of returns our shareholders deserve,” Brent Zettl said in the letter.

“We are determined to fight by all legal means available to make that happen and we ask for your support in keeping CanniMed a proud Saskatchewan-based company.”

A government spokeswoman said in an email that some MLAs have received the letter while others have not. The Ministry of the Economy, she said, “views this strictly as a commercial transaction, and will not be commenting further.”

CanniMed, which began trading a year ago, employs around 200 people at its growing facility southeast of Saskatoon. The facility is in the midst of a $10.5-million expansion aimed at boosting cannabinoid oil production.

Aurora Cannabis Inc., which is headquartered in Vancouver and has significant operations in Alberta, launched its hostile takeover bid last month after CanniMed’s board rebuffed what it called an “unsolicited offer.”

The larger company controls around 38 per cent of CanniMed’s stock through shareholder “lockup” agreements, of which 23 per cent is owned by two Saskatchewan-based venture capital funds: Golden Opportunities Fund Inc. and Saskworks Venture Fund Inc.