In a first-of-its-kind type of transaction, a U.S. publicly-traded company has acquired a Canadian licensed producer of cannabis, Hydropothecary, on the morning after the change in the government leadership that suggests the potential legalization of cannabis for adult-use in the country. Canadian Cannabis Corp (OTC: CCAN), which is incorporated in Delaware but operates out of Ontario, announced today that it is paying $21.3mm to acquire 100% of the company, which received its license earlier this year. The terms of the deal include $6mm in cash, of which a $500K deposit was already made, and the balance in stock. CCAN recently filed its 10-K but has been delinquent in its SEC filings in 2015.
Hydropothecary, which was licensed to sell earlier this year, has a greenhouse in Gatineau, Quebec with 7500 s.f. of cultivation currently that will expand to 35K s.f. early next year. The company offers premium cannabis with its own proprietary branding based upon the time of day it is consumed and priced at $15 per gram (about 2X the average price of medical cannabis in Canada). Hydropothecary management had previously suggested that it intended to go public via the TSX Venture.
Hydropothecary Co-founder and CEO Sébastien St. Louis
Together with the talented CCC team, we believe we can grow the company into the world’s largest comprehensive medical marijuana provider, while continuing to provide our customers with the highest standards of quality and service.