Canadian companies will “pounce” on deals in the US once they are legally allowed to, says a mergers and acquisitions (M&A) expert.

As the marijuana market continues its work of expansion and development, M&A’s have dominated conversation in the space this year.


Dena Jalbert, founder and CEO of Align Business Advisory Services a firm aiding companies on M&A activity, told the Investing News Network (INN) as the US cannabis market opens up, Canadian companies will benefit from the experience and capital gained to fully enter the space.

“[Canadian cannabis companies] just have a knowledge share that US businesses don’t have yet and they have capital,” Jalbert said.

The US market remains off limits for Canadian cannabis companies publicly traded on TMX Group-operated exchanges due to restrictions placed by the regulators.

Canadian investors have gained access to the US cannabis space through investments on the Canadian Securities Exchange (CSE), thanks to its decision to not block listings from companies pursuing interest in legal cannabis states.

“In the US, because it’s still so regulated, there’s not a lot of capital flowing and that’s a restriction,” Jalbert said.

The advisor added larger issuers from the US market will be able to perform M&A through the cash positions built up in the market.

The size of deals for CSE-listed US multi-state operators has continued to grow as the business play continues to gains popularity for US and Canadian investors.

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Throughout 2018, the cannabis public sector has faced criticism of how valuable, exactly, companies in the space really are.

This year Canadian licensed producers (LPs) Aurora Cannabis (NYSE:ACB,TSX:ACB) and Canopy Growth (NYSE:CGC,TSX:WEED) have used their stock for multimillion dollar acquisition deals.

In March, Aurora closed its purchase of fellow LP CanniMed Therapeutics for a combination of C$62.8 million Aurora common shares and a cash consideration of approximately C$121.5 million.

While in July, Aurora also completed a transaction denominated the “largest cannabis industry transaction” for MedReleaf.

Also in July, Canopy announced its acquisition of Hiku Brands, a retail and brand focused cannabis company.

Canopy also did a deal Jalbert expects to become the norm in the industry — an intellectual property (IP) acquisition for the assets of Colorado based cannabis research company ebbu worth C$25 million in cash and the issuance of over 6 million common shares.

“I think most of the deals that we’re going to see are going to be IP specific because there’s only so much land,” Jalbert said.

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Jalbert explained valuations for cannabis ventures will start to normalize, despite remaining higher than most industries due to the growth aspect for the market.

She explained when working with clients in doing research to reach a proper valuation for an acquisition, her firm uses information on recent achievements and its multiples, current assets, workforce and leadership in place.

Big players coming to the cannabis party

The conversation around M&A activity in the cannabis space has expanded to include the entry of potential massive corporations evaluating the growth in the industry.

Rumors have appeared about established companies such as The Coca-Cola Company (NYSE:KO), alcohol maker Diageo (NYSE:DEO) and parent company for Marlboro cigarettes Altria Group (NYSE:MO) all getting close to completing cannabis deals.

While Coca-Cola stated it has “no interest in marijuana or cannabis,” the beverage company is watching for the cannabidiol (CBD) market’s growth in order to use it as a “an ingredient in functional wellness beverages around the world.”

On Tuesday (December 4), Canadian LP Cronos Group (NASDAQ:CRON,TSX:CRON) confirmed talks are currently taking place for an investment deal of sorts with Altria.

“No agreement has been reached with respect to any such transaction and there can be no assurance such discussions will lead to an investment or other transaction involving the companies,” Cronos said.

Jalbert told INN in most acquisitions where a big established company purchases a smaller venture “what’s in it for the big company is they get to grab something new that they don’t have and they get to leverage their existing infrastructures.”

Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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Rosen Law Firm, a global investor rights law firm, reminds purchasers of the securities of Aurora Cannabis Inc. (NYSE: ACB) between February 13, 2020 and September 4, 2020, inclusive (the “Class Period”), of the important December 1, 2020 lead plaintiff deadline in the securities class action. The lawsuit seeks to recover damages for Aurora investors under the federal securities laws.

To join the Aurora class action, go to http://www.rosenlegal.com/cases-register-1965.html or call Phillip Kim, Esq. toll-free at 866-767-3653 or email pkim@rosenlegal.com or cases@rosenlegal.com for information on the class action.

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Company: 4Front Ventures Corp.

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  4Front Ventures Corp. (CSE: FFNT) (OTCQX: FFNTF) (” 4Front ” or the ” Company “) is pleased to announce that it has completed its previously announced bought deal prospectus offering (the ” Offering “) of units of the Company (” Units “), for aggregate gross proceeds of C$17,251,150 including full exercise of the over-allotment option granted to the underwriters in connection therewith.

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Bronstein, Gewirtz & Grossman, LLC reminds investors that a class action lawsuit has been filed against the following publicly-traded companies. You can review a copy of the Complaints by visiting the links below or you may contact Peretz Bronstein, Esq. or his Investor Relations Analyst, Yael Hurwitz of Bronstein, Gewirtz & Grossman, LLC at 212-697-6484. If you suffered a loss, you can request that the Court appoint you as lead plaintiff. Your ability to share in any recovery doesn’t require that you serve as a lead plaintiff. A lead plaintiff acts on behalf of all other class members in directing the litigation. The lead plaintiff can select a law firm of its choice. An investor’s ability to share in any potential future recovery is not dependent upon serving as lead plaintiff

Tactile Systems Technology (NASDAQ:TCMD)
Class Period:
May 7, 2018 – June 8, 2020
Deadline: November 30, 2020
For more info: www.bgandg.com/tcmd

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Khiron Life Sciences Corp. (“ Khiron ” or, the “ Company ”) (TSXV: KHRN), (OTCQB: KHRNF), (Frankfurt: A2JMZC), announced today that it has re-filed its unaudited condensed interim consolidated financial statements, together with the notes thereto, for the three and six months ended June 30, 2020 and 2019 (the “ Interim Financial Statements ”) to correct, among other things, certain 2019 comparative period information and to update certain presentation arising from the Company’s early adoption of IFRS 3 in late 2019, which changes were identified in connection with the Company’s review engagement with its auditor. The Company does not consider these adjustments either individually nor in the aggregate, to be material.

The re-filed Interim Financial Statements reflect changes to the Condensed Interim Consolidated Statements of Loss and Comprehensive Loss comparative period to remove transaction fees from the income statement and capitalize them to the applicable acquisition in accordance with the Company’s early adoption of the amended IFRS 3 as set out in Note 2, and to reclassify $1 million from general and administrative expenses to transaction fees for presentation purposes to conform with the Company’s presentation used in its audited consolidated financial statements for the years ended December 31, 2019 and 2018 (the “ Audited Annual Financial Statements ”). The re-filed interim Financial Statements also reflect changes to the Condensed Interim Consolidated Statement of Changes in Shareholders’ Equity to correct the 2019 comparative period balances as they incorrectly reflect Q1 2019 period balances, update certain presentation to conform with the Company’s presentation used in its Audited Annual Financial Statements; and reduce the valuation conclusion of the Company’s acquisition of NettaGrowth International Inc. to conform with the Audited Annual Financial Statements. The re-filed Interim Financial Statements also bring forward the subsequent event note disclosure.

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