Transaction expands IMC’s footprint into Israel’s largest city while positioning the Company as one of the largest retailers of medical cannabis in the country
TORONTO, and GLIL YAM, Israel, March 30, 2022 /PRNewswire/ — IM Cannabis Corp. (the “Company” or “IM Cannabis”) (CSE: IMCC) (NASDAQ: IMCC), a leading medical and adult-use recreational cannabis company with operations in Israel, Canada, and Germany, has completed the strategic acquisition of 51% of the rights in Oranim Pharm partnership (“Oranim Pharm”). Oranim Pharm is one of the largest pharmacies selling medical cannabis in Israel and the largest pharmacy selling medical cannabis in the Jerusalem area. The acquisition was completed through IMC Holdings Ltd. (“IMC Holdings”), a wholly-owned subsidiary of IM Cannabis Corp., following receipt of all requisite approvals, including from the Israeli Medical Cannabis Agency (“IMCA”).
Centrally located in Jerusalem, Oranim Pharm has a successful 14-year track record of serving the needs of its loyal customer base in the area. For the twelve months ending October 31, 2021, Oranim Pharm generated revenues of approximately $16.5 million, with a gross margin¹ from Cannabis activity of approximately 25% and positive EBITDA. Oranim Pharm holds a pharmacy license from the IMCA to sell medical cannabis to patients.
The successful acquisition of Oranim Pharm puts IM Cannabis at the forefront of medical cannabis distribution in Israel. As we make further progress with our vertical integration strategy, this transaction expands our reach in Israel with a strategic entry point into the country’s largest city.
Oren Shuster, Chief Executive Officer of IM Cannabis
In addition, our ability to sell IMC brands directly through the pharmacies we own allows us to increase our margin profile while providing local medical cannabis patients with increased access to high-quality, premium cannabis. Given the rapid growth and potential upcoming legislative reform in the Israeli medical cannabis market, we view the addition of Oranim Pharm to the IMC family as a timely and mission-critical contribution to our near- and long-term success.
All amounts below are in Canadian dollars unless otherwise stated.
IMC Holdings acquired 51.3% of the outstanding ordinary shares of Oranim Plus Pharm Ltd., an Israeli company holding 99.5% of the rights in Oranim Pharm, resulting in IMC Holdings holding 51% of the rights in Oranim (the “Acquisition”).
As first announced in December 2021, IMC Holdings signed a definitive agreement in respect of the Acquisition for total consideration of approximately NIS 11.94 million (approximately $4.6 million), to be paid in cash and common shares of the Company. The cash consideration component of approximately NIS 10.40 million (approximately $4.0 million) was to be paid in two installments, with 50% (NIS 5.2 million) paid at signing of the definitive agreement and 50% (NIS 5.2 million) will be payable in the first quarter of 2023. In satisfaction of the share consideration component of NIS 1.54 million (approximately $600,000), the Company issued 251,001 common shares at a deemed issue price of US$1.9 (approximately $2.37) per share, calculated based on the average closing price of the common shares of the Company on the Nasdaq Capital Market for the 14 trading day period immediately preceding March 28, 2022. The shares issued as part of the Acquisition are subject to a staggered three-month lockup commencing at closing.
About IM Cannabis Corp.
IM Cannabis (NASDAQ: IMCC, CSE: IMCC) is a leading international cannabis company providing premium products to medical patients and adult-use recreational consumers. IM Cannabis is one of the very few companies with operations in Israel, Germany, and Canada, the three largest federally legal markets. The ecosystem created through its international operations leverages the Company’s unique data-driven perspective and product supply chain globally. With its commitment to responsible growth and financial prudence, and the ability to operate within the strictest regulatory environments, the Company has quickly become one of the leading cultivators and distributors of high-quality cannabis globally.
The IM Cannabis ecosystem operates in Israel through its commercial relationship with Focus Medical Herbs Ltd. (“Focus Medical”), which cultivates, imports, and distributes cannabis to medical patients, leveraging years of proprietary data and patient insights. The Company also operates medical cannabis retail pharmacies, online platforms, distribution centres and logistical hubs through IMC Holdings in Israel that enable the safe delivery and quality control of IM Cannabis products throughout the entire value chain. In Germany, the IM Cannabis ecosystem operates through Adjupharm GmbH (“Adjupharm”), where it also distributes cannabis to pharmacies to medical cannabis patients. In Canada, IM Cannabis operates through Trichome Financial Corp. and its subsidiaries TJAC and MYM, where it cultivates and processes cannabis for the adult-use market at its Ontario, Nova Scotia, and Quebec facilities under the WAGNERS and Highland Grow brands.
 For an explanation of this metric, please refer to the section of this press release titled “Non-IFRS Financial Metrics”