In this week's "Rising High," The Fly's recurring series focused on cannabis and psychedelic stock news, The Fly looks back on acquisitions, an evaluation of strategic alternatives and a product launch.
SNDL TO ACQUIRE THE VALENS COMPANY: SNDL Inc. (SNDL) and The Valens Company (VLNS) announced Monday that they have entered into an arrangement agreement to combine their businesses and create a vertically integrated cannabis platform. Pursuant to the terms of the agreement, SNDL will acquire all of the issued and outstanding common shares of Valens, other than those owned by SNDL and its subsidiaries, by way of a statutory plan of arrangement. Valen’s shareholders will receive, for each Valens Share, 0.3334 of a common share of SNDL. Based on the August 19, 2022 close of the SNDL shares on the Nasdaq Capital Market exchange, the consideration represents an implied value of C$1.26 per Valens share, for total consideration of approximately C$138M. The companies said, “With 555,500 square feet of cultivation and manufacturing space and 185 cannabis stores under the Spiritleaf and Value Buds banners, the combined company will offer a complete portfolio of branded products to consumers in Canada through its own supply and distribution channels. With approximately C$314M in net cash and no debt, SNDL will continue to have one of the strongest balance sheets in the North American regulated cannabis industry. SNDL will also have the highest pro forma Canadian cannabis revenue on a last fiscal quarter annualized basis.” The combined company will operate as SNDL Inc., and Valens shareholders will own approximately 9.5% of the pro forma entity. The combination of SNDL and Valens is expected to deliver more than C$10M of annual cost synergies. Together with incremental revenues from greater distribution of Valens products, it is estimated that the transaction will deliver upwards of C$15M of additional EBITDA on an annual run-rate basis through synergies and other strategic initiatives. The transaction is expected to close during January 2023.
AURORA BUYS 50.1% INTEREST IN BEVO FARMS: Aurora Cannabis (ACB) announced Thursday that a wholly-owned subsidiary has acquired a controlling interest in Bevo Agtech, the sole parent of Bevo Farms, a supplier of propagated vegetables and ornamental plants in North America. Concurrent with closing of the Bevo transaction, Bevo entered into an agreement to acquire the company's Aurora Sky facility in Edmonton, Alberta through the acquisition of one of Aurora's wholly-owned subsidiaries. The company said, “The transaction allows Aurora to immediately benefit from a profitable, cash flow positive and growing business, and may have the potential to drive long term value to Aurora's existing cannabis business via the application of Bevo's industry leading plant propagation expertise.” Aurora, through its subsidiary, will acquire 50.1% of Bevo's outstanding common shares, take a controlling position on Bevo's board of directors and financially consolidate Bevo. Bevo's management team are to remain significant shareholders and stay in place to embark on a growth plan, including the use of the Aurora Sky facility for orchid cultivation and vegetable propagation. For the twelve months ended June 30, 2022, Bevo has achieved revenues of C$39M and Adjusted EBITDA of C$9M. Aurora is purchasing its controlling interest in Bevo from certain of Bevo's existing shareholders. Total cash consideration paid by a subsidiary of Aurora on closing was approximately C$45M. Up to an additional C$12M shall be payable by a subsidiary of Aurora to the Bevo Selling Shareholders over the three years following closing of the transaction, conditional on Bevo achieving certain financial milestones at its Site One facility in Langley. Up to C$25M could be payable over time by Bevo to Aurora in connection with the Aurora Sky Transaction, based on Bevo achieving certain financial milestones at the Aurora Sky Facility. Closing of the Aurora Sky transaction is conditional upon receipt of certain third-party consents.
MEDMEN CONSIDERS STRATEGIC ALTERNATIVES IN NY: MedMen Enterprises (MMNFF) announced Monday the close of a $67M deal with Florida-based private company Green Sentry Holdings for the Company’s Florida-based operations, including its license, dispensaries, inventory, and cultivation operations. The deal is comprised of $63M in cash and approximately $4M in liabilities to be assumed by Green Sentry. The deal also includes the license of MedMen’s trademarks in the state. MedMen also announced it’s currently exploring strategic alternatives for New York, where the company operates a cultivation facility and four dispensaries under the state’s existing medical program. MedMen's operational footprint is primed to benefit from the pending rollout of recreational sales in New York. CEO Ed Record said, “We are focused on maximizing our existing footprint, including our operations in New York. New York’s adult-use market will be game-changing for the entire industry, and we are considering all options to ensure strong shareholder return. This includes the potential sale of assets and/or licensing of the MedMen trademark.”
COLUMBIA CARE BRINGS TRIPLE SEVEN IN PENNSYLVANIA: Columbia Care (CCHWF) announced Tuesday its Triple Seven brand has launched in Pennsylvania, bringing the brand’s total footprint to ten markets. Triple Seven is now available in: Arizona, California, Delaware, Illinois, Maryland, Massachusetts, New Jersey, Ohio, Pennsylvania, and West Virginia. The Company anticipates the brand will be available in Utah, Virginia, and Washington, D.C. by Q4, pending regulatory approvals. Triple Seven boasts nearly a dozen forms, including whole flower, pre-rolls, and vapes. The brand is available to wholesale partners across all ten markets.
GOODNESS GROWTH LAUNCHES BOUNDARY WATER PRE-ROLLS: Goodness Growth Holdings (GDNSF) announced Thursday the launch of its Boundary Waters line of cannabis pre-rolls focused on sustainability and environmental preservation. Boundary Waters pre-rolls are hand-rolled from premium whole flower and are available in Sativa, Indica and hybrid strains, and can be purchased in five-roll and ten-roll packs. The company plans to donate a portion of proceeds from the sale of Boundary Waters products to help keep the Boundary Waters clean and safe. Boundary Waters pre-rolls are currently only available in Minnesota at Green Goods dispensaries operated by the company's Minnesota subsidiary. Subject to regulatory approvals, the company plans to expand the Boundary Waters brand to include additional product offerings and other markets.
OTHER CANNABIS/PSYCHEDELIC STOCKS: Publicly-traded companies in the space include Acreage (ACRHF), Akerna (KERN), Aleafia (ALEAF), Atai Life Sciences (ATAI), Audacious (AUSAF), Awakn Life Sciences (AWKNF), Ayr Wellness (AYRWF), BC Craft (CRFTF), Body and Mind (BMMJ), Cannara Biotech (LOVFF), Canopy Growth (CGC), Chicago Atlantic (REFI), Clever Leaves (CLVR), Compass Pathways (CMPS), CordovaCann (LVRLF), Cresco Labs (CRLBF), Cronos (CRON), Curaleaf (CURLF), CURE Pharmaceutical (CURR), CV Sciences (CVSI), Delic Holdings (DELCF), Delta 9 (DLTNF), Entourage Health (ETRGF), Fire & Flower (FFLWF), Flora Growth (FLGC), General Cannabis (CANN), Greenlane (GNLN), Green Thumb (GTBIF), GrowGeneration (GRWG), Hemp (HEMP), HEXO (HEXO), High Tide (HITI), India Globalization Capital (IGC), Indiva (NDVAF), Innovative Industrial Properties (IIPR), InterCure (INCR), IM Cannabis (IMCC), Wellbeing Digital (KONEF), Khiron Life Sciences (KHRNF), Lowell Farms (LOWLF), Lotus Ventures (LTTSF), MediPharm Labs (MEDIF), Neptune Wellness (NEPT), NewLake Capital (NLCP), Thermic Science (ENDO), Organigram (OGI), Planet 13 (PLNHF), Revitalist (RVLWF), RIV Capital (CNPOF), Relmada (RLMD), RYAH Group (RYAHF), Sproutly (SRUTF), Stem Holdings (STMH), Small Pharma (DMTTF), Skye Biosciences (SKYE), Sunniva (SNNVF), TerrAscend (TRSSF), Tetra Bio-Pharma (TBPMF), Tilray (TLRY), Trulieve (TCNNF), Tryp Therapeutics (TRYPF), Verano Holdings (VRNOF), Village Farms (VFF), Wesana Health (WSNAF), Zynerba (ZYNE) and 4Front Ventures (FFNTF).
ZYNE
+
Trulieve Cannabis
+1.08 (+8.74%)
Tilray
+0.065 (+1.73%)
IGC Pharma
+
Green Thumb Industries
+0.8299 (+7.20%)
Trees Corporation
+
Cronos Group
+0.075 (+2.42%)
Canopy Growth
+ (+0.00%)
CannTrust
+
CV Sciences
+
Relmada Therapeutics
-0.03 (-0.09%)
Compass Pathways
+0.09 (+0.49%)
Atai Life Sciences
+0.13 (+2.79%)
Goodness Growth
+0.15 (+12.50%)
Columbia Care
+0.2 (+11.36%)
MedMen
+
Aurora Cannabis
-0.02 (-1.29%)
Valens
+
Sundial Growers
-0.04 (-1.43%)