Scythian Biosciences announced the potential to acquire a stake in 3 Boys Farms a licensed producer of medical cannabis in Florida.
Scythian Biosciences (TSXV:SCYB) has made its first strategic purchase, the company announced on Monday (July 30). following the sale of its Latin American assets to a major Canadian cannabis licensed producer (LP). The company also revealed a listing change for its stock.
On July 17 Scythian announced a transaction with Aphria (TSX:APH) for all of its interests across the Latin American cannabis market for a price tag of C$193 million in Aphria shares paid to Scythian.
The TSX Venture-listed (TSXV) cannabis company is now eyeing an entry into the Florida market with the purchase of CannCure Investments, a Canadian company currently working on the acquisition of a stake in 3 Boys Farms, a licensed producer in the state.
Rob Reid, Scythian’s CEO, said Florida is becoming one of the “largest and fastest growing medical cannabis markets” in the US.
The prized acquisition of 3 Boys Farms includes its 40,000 square feet of greenhouses for cannabis cultivation and its licenses for retail shops. According to Scythian, the Florida producer is in the process of securing locations across the state.
Scythian drops TSXV to pursue US asset
Due to the potential entry of the US cannabis market, Scythian revealed to investors it will stop offering its stock on the TSXV and will now list on the Canadian Securities Exchange (CSE), an exchange that allows listings to hold assets in the federally illegal market.
The company told investors it expects the exchange transition will be done within the next 10 business days. Currently Scythian’s share trading is halted.
The entire deal, which also includes the acquisition of an undisclosed medical healthcare organization in Florida, consist of a package payment Scythian will initially purchase a 70 percent stake in CannCure and obtain the option for the remaining 30 percent at the same valuation.
According to the company the transaction consists of a C$93.3 million in equity from Scythian common shares, with the addition of a C$43.2 million cash investment into the company.
In order for the Scythian-CannCure transaction to complete, the investment company must close its initial 60 percent stake acquisition of 3 Boys Farms before August 31.
Scythian is also requiring CannCure to hold an option to acquire the balance of the issued and outstanding shares before the end of 2018.
Following the dump of its Latin American assets to Aphria, Scythian has elected to seek a stake in the US market which will lead it to swap public exchanges.
Florida has proved to be a worthwhile market for public cannabis operators and a tentative upcoming vote on the legalization of cannabis for adult-use could provide an even higher boost to the assets in the state.
The last available share price for Scythian was C$3.49 on July 25.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.