In a stunning move to the cannabis business world, industry giant Canopy Growth (TSX:WEED; NYSE:CGC) announced on Tuesday (July 10) it will acquire the brand and retail-focused Hiku Brands (CSE:HIKU).
According to the statement on Tuesday, the Hiku board unanimously determined the Canopy proposal is a “superior” alternative to the WeedMD deal.
The agreement proposal sees that Hiku shareholders will get 0.046 of a Canopy share per Hiku share–the equivalent of C$1.91 per Hiku share–representing C$269.2 million in valuation for the deal.
Alan Gertner, CEO of Hiku, said this transaction is an “incredible step” for the company.
“Ultimately, together we will continue to build one of the world’s most engaging and successful cannabis retail and brand business,” Gertner said in a statement.
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.
An additional 21 percent will also be given based on the closing price of the two companies from yesterday’s trading session.
WeedMD confirmed the split with Hiku in a statement of its own. The company will obtain a C$10 million termination fee for its previous deal with Hiku, advanced by Canopy.
“[A]ll of our commitments are fully funded and we’re in a solid position financially and operationally to continue executing and delivering on all of our goals and objectives,” WeedMD CEO Keith Merker said.
Prior to Tuesday’s announcement, WeedMD obtained a supply agreement on July 5 for and undisclosed amount of legal cannabis product with the province of Alberta for the first year of adult-use sales starting on October 19.
The Investing News Network (INN) reported on a research note issued in June from Mackie Research Capital analyst Greg McLeish, who had reiterated his “Buy” rating to Hiku’s shares based on the proposed merger with WeedMD.
Branding has gained recognition as a key metric for investors to evaluate cannabis companies in the public sector.
This deal and confirmation of value by Canopy only sees to strengthen the position of branding in the cannabis space as the sector continues its maturation.
Overall, the cannabis industry has seen an uptick in acquisitions as companies seek to be fully prepared for the start of legalization in Canada.
At the end of Tuesday’s trading session. the market reaction for all the parties involved were down. Hiku declined 0.68 percent to close at C$1.46, WeedMD was down 0.49 percent to C$2.05, and Canopy dipped 1.52 percent to close at $C38.10.
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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.
Green Thumb Industries Inc. (Green Thumb) (CSE: GTII) (OTCQX: GTBIF), a leading national cannabis consumer packaged goods company and owner of Rise™ retail stores, today announced that its executive team will participate in the following conference in March 2021:
Needham 2 nd Annual Virtual Cannabis Conference, March 3, 2021: Management will participate in one-on-one meetings.
Meanwhile, two longstanding cannabis partners ended their relationship.
Trulieve to donate $20,000 in scholarship funding and $15,000 to support leadership development
Trulieve Cannabis Corp . (CSE: TRUL) (OTC: TCNNF), a leading and top-performing cannabis company in the United States today announced a new partnership with the Thurgood Marshall College Fund (TMCF), the nation’s largest organization exclusively representing the Black College Community. Trulieve will donate $20,000 to help fund several college scholarships awarded to students who are attending one of the organization’s member-schools as part of Trulieve’s diversity, equity, and inclusion initiatives. The $15,000 in talent funding is earmarked to support TMCF’s internship program, reaching a diverse talent pool of students and alumni from their 47 member-schools to provide immersive experiences at Trulieve.
The new dispensary expands patient access to Florida’s largest inventory of medical cannabis products
Trulieve Cannabis Corp. (CSE: TRUL) (OTCQX: TCNNF) (“Trulieve” or “the Company”), a leading and top-performing cannabis company based in the United States announced today the opening of a brand-new Florida dispensary, the Company’s 80th nationwide. The new location marks the Company’s first in Tamarac and third in Broward County expanding patient access to Florida’s largest and broadest assortment of high-quality medical cannabis products.
Revive Therapeutics Provides Update on FDA Phase 3 Clinical Trial for Bucillamine in COVID-19 with Planned Completion and Emergency Use Authorization Request
Revive Therapeutics Ltd. (“Revive” or the “Company”) (CSE: RVV, USA: RVVTF), a specialty life sciences company focused on the research and development of therapeutics for medical needs and rare disorders, is pleased to announce an update on the Company’s U.S. Food & Drug Administration (“FDA”) Phase 3 clinical trial (the “Study”) to evaluate the safety and efficacy of Bucillamine in patients with mild to moderate COVID-19.
With its recent $23 million dollar financing, the Company plans to aggressively expand from 14 clinical sites to up to 50 clinical sites to meet the next enrollment goals for the Study in Q2-2020. The Study is a randomized, double-blinded, placebo-controlled trial and the safety and efficacy data analyzed at each interim analysis timepoint of 210, 400, 600 and 800 completed patients are only made available to the Independent Data and Safety Monitoring Board (“DSMB”) for review and recommendations on continuation, stopping or changes to the conduct of the Study. In the event of any serious safety concerns, the DSMB would be notified to determine any risks and provide its recommendations. To date, in this initial 210 interim point there have been no serious safety concerns that required the DSMB to be notified.