Canopy Rivers sells Canapar interest as Stem completes Driven acquisition
In this week's "Rising High," The Fly's recurring series focused on cannabis stock news, The Fly looks back an equity interest sale, acquisitions and a drug filing.
CANOPY RIVERS SELLS CANAPAR INTEREST: Canopy Rivers (CNPOF) announced Wednesday it has entered into a definitive share purchase agreement with RAMM Pharma (RAMM) pursuant to which the company has sold its 49% common equity interest in Canapar for consideration of up to C$9M. Under the terms of the agreement, on closing, RAMM delivered a cash payment of C$7M to Canopy Rivers to purchase the Company's 29,833,333 common shares in Canapar. The transaction also includes contingent consideration of C$2M, to be paid upon achievement of certain operational milestones. The contingent portion of the consideration will be satisfied, at RAMM's sole discretion, in either cash or through the issuance of common shares in RAMM to the company. "The divestment of our equity interest in Canapar represents an important reallocation of capital as we adjust our go-forward investment strategy," said Canopy Rivers CEO Narbé Alexandrian.
STEM COMPLETES DRIVEN ACQUISITION: Stem Holdings (STMH) announced Wednesday that it has completed its previously announced acquisition of Driven Deliveries (DRVD), an e-commerce and DaaS provider with proprietary logistics and omnichannel UX/CX technology. The acquisition was completed under the terms of a definitive agreement and plan of reorganization, pursuant to which Driven shareholders received one share of common stock of Stem for each Driven share held. The combined market capitalization of the company is $65M. The company is projected to have revenues of $75M in CY21 and a combined gross profit of $30M. The acquisition is expected to be immediately accretive to earnings per share of the company.
IM CANNABIS TO ACQUIRE TRICHOME: IM Cannabis Corp. (IMCNF) and Trichome Financial (TRICF) announced Wednesday that they have entered into a definitive agreement to combine their businesses into a leader in adult-use recreational and medical cannabis. Following completion of the transaction, the combined company will maintain offices in Glil Yam, Israel and Toronto, Canada, and will operate under the IM Cannabis Corp. corporate name with common shares trading on the Canadian Securities Exchange under the ticker symbol "IMCC." The company remains on track to finalize its listing on the NASDAQ Capital Market in Q1. The companies said, “The combined company is expected to be a global cannabis production and distribution leader with increasing revenue in Israel and Germany's medical cannabis markets under the IMC brand, and in Canada's adult-use recreational market through Trichome's wholly-owned subsidiary, Trichome JWC Acquisition. The combined company is anticipated to benefit from each team's cross-functional brand-building and distribution expertise, which is expected to enable the combined company to immediately begin planning for a roll-out of JWC products in Israel and the EU…With continued revenue growth in all operating regions expected throughout 2021 and by maintaining a disciplined and lean cost structure, the combined company is forecast to be adjusted EBITDA positive in 2021. Under the terms of the Transaction, the shareholders of Trichome will receive 0.981 common shares of IMC for each common share of Trichome. Upon the completion of the Transaction, IMC shareholders will own approximately 82% of the combined company and Trichome shareholders will own 18%. Completion of the Transaction will also be subject to court and regulatory approvals, which are currently expected to be received in the first half of 2021.
SUNDIAL GROWERS ACQUIRES SPECIAL PURPOSE VEHICLE: Sundial Growers (SNDL) announced Wednesday that it has closed the acquisition of a special purpose vehicle. Consideration for the investment, totaling C$58.9M in cash, was funded from Sundial's available cash reserves. The special purpose vehicle owns C$58.9M of aggregate principal amount of senior secured debt of Zenabis, a subsidiary of Zenabis Global (ZBISF). The senior loan bears interest at a rate of 14% per annum and has a maturity date of March 31, 2025, with principal repayments under certain circumstances over time including C$7M payable on December 31. The senior loan is secured by the assets of Zenabis and its subsidiaries and is guaranteed by the parent. In aggregate the assets represent all the cannabis related assets of Zenabis. Pursuant to the terms of the senior loan, Zenabis will also pay Sundial a royalty based on quarterly sales revenue from its medical, recreational and wholesale cannabis lines net of value added or sales taxes.
TETRA FILES NDS FOR REDUVO: Tetra Bio-Pharma (TBPMF) announced Wednesday that the New Drug Submission for the Dronabinol Soft Gel capsules has been filed with Health Canada. The company said, “If successful, it will provide Tetra with its first Drug Identification Number for a THC-based prescription drug. The new drug name, REDUVO, is pending approval by Health Canada. REDUVO will allow Tetra to establish a revenue stream based on a synthetic cannabinoid drug for major markets in Chemotherapy-induced Nausea and Vomiting.”
OTHER CANNABIS STOCKS: Other publicly-traded companies in the space include Akerna (KERN), Aleafia (ALEAF), Aphria (APHA), Aurora Cannabis (ACB), Auxly Cannabis (CBWTF), CannTrust (CTST), Canopy Growth (CGC), CordovaCann (LVRLF), Cresco Labs (CRLBF), Cronos Group (CRON), CV Sciences (CVSI), CURE Pharmaceutical (CURR), Delta 9 (VRNDF), Emerald Health (EMHTF), FluroTech (FLURF), General Cannabis (CANN), Greenlane (GNLN), Green Thumb Industries (GTBIF), GrowGeneration (GRWG), Harborside (HBORF), Hemp (HEMP), HEXO (HEXO), India Globalization Capital (IGC), Indiva (NDVAF), Indus Holdings (INDXF), Inner Spirit (INSHF), Innovative Industrial Properties (IIPR), Khiron Life Sciences (KHRNF), Liberty Health Sciences (LHSIF), MediPharm Labs (MEDIF), MedMen Enterprises (MMNFF), Mjardin (MJARF), Neptune Wellness (NEPT), Omnicanna (ENDO), Organigram (OGI), Planet 13 (PLNHF), Sproutly (SRUTF), Sunniva (SNNVF), Supreme Cannabis (SPRWF), Valens (VLNCF), Tilray (TLRY), Trulieve (TCNNF), Village Farms (VFF), Vireo Health (VREOF), WeedMD (WDDMF), Wildflower Brands (WLDFF), YSS Corp. (YSSCF), Zynerba (ZYNE) and 4Front Ventures (FFNTF).