Canopy Growth Corporation(“Canopy Growth”) (TSX:WEED) (NYSE: CGC) is acquiring Tokyo Smoke’s parent company, Hiku Brands Company Ltd. (“Hiku”) (CSE:HIKU), for about $250 million in an all-stock deal.
The Smiths Falls-based Canopy, the largest medical cannabis company in the world by sales, acquiring the Toronto-based Tokyo Smoke’s parent company, Hiku, is to expand the former’s retail portfolio.
Tokyo Smoke is a lifestyle brand that focuses on the legal medical cannabis industry.
Canopy and Hiku made the announcement of the acquisition on Tuesday. The deal states that Canopy to acquire all of the issued and outstanding common shares of Hiku.
The Financial Post reported that the news comes as a surprise since Canopy’s CEO Bruce Linton had previously implied that he wasn’t looking to acquire other publicly traded licensed producers due to steep valuations.
But Hiku is seen as much less of a grower than a retail brand.
In April, Hiku had agreed to a $240 million merger with licensed producer WeedMD Inc. However, Hiku paid WeedMD a $10 million termination fee in order to accept Canopy’s “superior proposal,” the Financial Post added.
The acquisition comes after Hiku was formed in January through the merger between Tokyo Smoke, a hipster coffee shop and marijuana accessory chain and the B.C.-based marijuana grower DOJA Cannabis Company Ltd.
Read more about the deal HERE.