Deals in the Canadian Cannabis Sector Start to Heat-up in 2018

ACB posted its Q3 results for this year. It recorded $16.1 million in revenues, up 211.1 percent from Q3 2017 and up 37.6 percent sequentially from Q2 2018.
ACB posted its Q3 results for this year. It recorded $16.1 million in revenues, up 211.1 percent from Q3 2017 and up 37.6 percent sequentially from Q2 2018. (File image via Canadian Press)

The Canadian Cannabis sector has seen its fair share of deals in the early parts of 2018.

With marijuana legalization on the horizon, more deals will surely occur in the better part of 2018. But the Canadian cannabis sector is already off to a rocking-start. Mergers and acquisitions have started to roll, some have the potential to change the make-up of the industry.

Here are some of the most notable deals to happen at the start of 2018:

Aurora Cannabis Invests in TGOD

The Green Organic Dutchman (TGOD) is a licensed medical producer out of Ancaster, Ontario. On Jan. 5, Aurora Cannabis closed a $55-million dollar deal to secure a 17.62% stake in the company. TGOD is eyeing an IPO release in March. The company said in a statement:

“Upon TGOD achieving certain corporate, operational, construction and financial milestones…Aurora shall have the option to incrementally increase its ownership interest in TGOD to 51 percent.”

Aurora’s deal with TGOD provides the company the right to buy up to 20 percent of TGOD’s annual marijuana harvest. They also announced that they have secured a joint-venture based in Denmark. 

Aurora vs CanniMed Continues…

Aurora continues to be in the news, with more information concerning their hostile takeover bid for CanniMed Therapuetics Inc.

On Jan. 2, Aurora stated that it had purchased 116,000 shares of Canimed. By Jan. 4, they had purchased another 91,800. They now own around 2.7% of the company.

In fact, Aurora values CanniMed at close to $600 million dollars. But CanniMed’s executive team rejected the proposal, viewing it as a “poison pill.” They in-turn decided to pursue an acquisition of Ontario company Newstrike Resources Ltd.

Shareholders of Aurora, CanniMed, and Newstrike will all vote later this month on the proposed deals.

Here is a round-up of other deals:

  • Victoria’s Emerald Health Therapeutics sells a portion of their company for $25-million to an unnamed investor (01/03/2018)
  • Aphria Inc. closes a 115-million bought-deal share offering (01/03/2018)
  • Golden Leaf Holdings Ltd. closes its previously announced purchase of Medical Marijuana Group Consulting Ltd. for $5-million (01/02/2018)
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