DOJA ​​Cannabis ​​And ​​Tokyo ​​Smoke ​​Announce ​Merger

Hiku acquires tokyo smoke

Merger ​​creates ​​Canada’s ​​first ​​retail- ​​& ​​brand-focused ​​cannabis ​​producer

  • Two ​​Canadian ​​cannabis ​​lifestyle ​​brands ​​join ​​forces ​​in ​​a ​​transformational ​​transaction, ​​bringing ​​together industry ​​leading ​​management ​​teams, ​​British ​​Columbia ​​curated ​​handcrafted ​​cannabis ​​production, ​​a portfolio ​​of ​​visionary ​​brands ​​and ​​a ​​growing ​​nationwide ​​retail ​​footprint.
  • Provides ​​the ​​first ​​public ​​markets ​​investment ​​opportunity ​​focused ​​on ​​cannabis ​​retail ​​and ​​brand; high-margin ​​verticals ​​with ​​significant ​​growth ​​potential.
  • A ​​strategic ​​financing ​​of ​​$12.5 ​​million ​​led ​​by ​​Aphria ​​Inc. ​​will ​​bolster ​​the ​​combined ​​company’s ​​cash ​​position to ​​approximately ​​$31 ​​million, ​​which ​​the ​​company ​​plans ​​to ​​invest ​​in ​​scaling ​​up ​​production ​​capacity, expanding ​​its ​​retail ​​footprint ​​and ​​further ​​building-out ​​its ​​portfolio ​​of ​​cannabis ​​brands.

CANADA: Cannabis ​​Company ​​Limited ​​​(“DOJA”)​ ​​and ​​TS ​​Brandco ​​Holdings ​ ​​​(“Tokyo ​​Smoke​“) have ​​announced ​​that ​​they ​​have ​​entered ​​into ​​a ​​binding ​​Letter ​​of ​​Intent ​ ​​​setting ​​out ​​the ​​terms ​​pursuant ​​to ​​which ​​​DOJA ​​proposes ​​to ​​acquire ​​all ​​of ​​the ​​issued and ​​outstanding ​​shares ​​in ​​the ​​capital ​​of ​​​Tokyo ​​Smoke ​​.  ​​ ​​It ​​is ​​anticipated ​​that ​​the ​​combined company ​​resulting ​​from ​​the ​​Merger ​​will ​​use ​​the ​​name ​​”Hiku ​​Brands ​​Company ​​Ltd.”

Concurrently, ​​DOJA ​​announced Aphria ​​has ​​committed ​​to ​​make ​​a ​​$10 million ​​strategic ​​equity ​​investment ​​into ​​Hiku. ​​Additionally, ​​the ​​parties ​​have ​​agreed ​​on ​​the ​​terms ​​of ​​a ​​supply agreement, ​​to ​​be ​​entered ​​into ​​in ​​connection ​​with ​​the ​​Merger ​​to ​​secure cannabis ​​concentrate ​​supply ​​for ​​Hiku’s ​​premium ​​brand ​​portfolio.

Upon ​​completion ​​of ​​the ​​Merger, ​​the ​​Company ​​will ​​have ​​a ​​robust ​​cash ​​position ​​of ​​approximately ​​$31 million, ​​which ​​it ​​plans ​​to ​​invest ​​in ​​expanding ​​its ​​cannabis ​​production ​​capacity, ​​growing ​​its ​​retail ​​footprint, and ​​adding ​​select ​​brands ​​to ​​its ​​portfolio ​​through ​​highly ​​strategic ​​and ​​complementary ​​acquisitions.

DOJA’s ​​Board ​​of ​​Directors ​​and ​​Tokyo ​​Smoke’s ​​Board ​​of ​​Directors ​​have ​​approved ​​the ​​Merger.

Highlights ​​of ​​the ​​Transformational ​​Transaction

  • Creation ​​of ​​the ​​first ​​retail-focused, ​​craft ​​cannabis ​​producer ​​with ​​​​portfolio ​​of ​​leading lifestyle ​​cannabis ​​brands: ​​​Hiku ​​will ​​be ​​differentiated ​​as ​​the ​​only ​​Canadian ​​craft ​​cannabis producer ​​with ​​significant ​​national ​​retail ​​presence ​​and ​​a ​​growing ​​portfolio ​​of ​​premium ​​cannabis lifestyle ​​brands ​​including ​​DOJA, ​​Tokyo ​​Smoke, ​​and ​​Van ​​der ​​Pop, ​​appealing ​​to ​​a ​​wide ​​variety ​​of consumers ​​across ​​Canada ​​and ​​globally.
  • Well ​​positioned ​​to ​​capitalize ​​on ​​Canada’s ​​recreational ​​cannabis ​​market ​​through ​​retail:
    Hiku ​​has ​​multiple ​​highly ​​recognizable ​​brands ​​and ​​strategies ​​in ​​place ​​to ​​operate ​​retail ​​cannabis stores ​​across ​​various ​​provinces​​​​Vertically ​​integrated ​​operations ​​position ​​Hiku ​​to ​​offer ​​exclusive products ​​in ​​Hiku-owned ​​stores ​​and ​​achieve ​​superior ​​margins ​​versus ​​peers.
  • Licensed ​​producer ​​under ​​the ​​​Access ​​to ​​Cannabis ​​for ​​Medical ​​Purposes ​​Regulations
    (ACMPR): ​​​7,100 ​​square ​​foot ​​production ​​facility ​​licensed ​​by ​​Health ​​Canada. ​​DOJA’s ​​second facility, ​​a ​​22,580 ​​sq ​​ft ​​warehouse, ​​will ​​house ​​the ​​FUTURE ​​LAB. ​​The ​​FUTURE ​​LAB ​​is ​​targeting ​​its Phase ​​1 ​​completion ​​by ​​Q2 ​​2018 ​​and ​​once ​​the ​​facility ​​is ​​fully ​​built-out ​​utilizing ​​an ​​industry ​​leading multi-tier ​​system ​​powered ​​by ​​LED ​​lighting ​​provided ​​by ​​Fluence ​​BioEngineering, ​​DOJA’s ​​annual production ​​capacity ​​is ​​expected ​​to ​​be ​​in ​​excess ​​of ​​5,000 ​​kgs.
  • Retail ​​locations ​​from ​​Eastern ​​to ​​Western ​​Canada, ​​with ​​plans ​​to ​​expand: ​​​Hiku ​​will ​​have seven ​​operational, ​​legal ​​cannabis ​​accessory ​​stores ​​with ​​locations ​​across ​​Canada ​​(Ontario, Alberta ​​and ​​British ​​Columbia), ​​representing ​​an ​​unprecedented ​​platform ​​to ​​build ​​brand ​​awareness and ​​reach ​​consumers. ​​Hiku ​​will ​​prioritize ​​retail ​​expansion ​​in ​​provinces ​​allowing ​​private ​​cannabis retail ​​and ​​Tokyo ​​Smoke ​​and ​​DOJA ​​will ​​respond ​​to ​​the ​​Government ​​of ​​Manitoba’s ​​Request ​​for Proposals ​​to ​​establish ​​retail ​​cannabis ​​stores ​​throughout ​​the ​​province.
  • Strategic ​​Partnership ​​with ​​Aphria: ​ ​​Aphria’s ​​strategic ​​investment ​​into ​​Hiku ​​marks ​​Aphria’s ​​first venture ​​into ​​British ​​Columbia’s ​​premium ​​cannabis ​​market. ​​Combined ​​with ​​the ​​Supply ​​Agreement, the ​​partnership ​​with ​​Aphria ​​brings ​​unparalleled ​​experience ​​in ​​cannabis ​​production ​​and ​​ensures secured ​​supply ​​for ​​what ​​is ​​expected ​​to ​​be ​​a ​​supply-constrained ​​market ​​at ​​the ​​onset ​​of legalization.
  • Led ​​by ​​industry ​​leading ​​management ​​and ​​team​: ​​Hiku ​​management ​​has ​​​breadth ​​and ​​depth ​​of expertise, ​​with ​​a ​​proven ​​track ​​record ​​of ​​building ​​and ​​scaling ​​businesses, ​​including ​​SAXX Underwear ​​and ​​a ​​$100 ​​million+ ​​business ​​at ​​Google. ​​The ​​supporting ​​team ​​brings ​​expertise ​​from the ​​retail, ​​cannabis, ​​finance, ​​design, ​​marketing ​​and ​​creative ​​fields.
  • Well ​​capitalized ​​for ​​local ​​and ​​global ​​growth:​​Post-Merger, ​​Hiku ​​is ​​expected ​​to ​​have ​​a ​​cash balance ​​of ​​approximately ​​$31 ​​million ​​and ​​to ​​be ​​well ​​positioned ​​to ​​expand ​​within ​​the ​​Canadian market ​​and ​​enter ​​into ​​the ​​emerging ​​global ​​cannabis ​​markets.
  • Enhanced ​​capital ​​markets ​​profile: ​​​The ​​combined ​​entity ​​post-financing ​​is ​​anticipated ​​to ​​have ​​a basic ​​market ​​capitalization ​​of ​​approximately ​​$175 ​​million ​​at ​​the ​​transaction ​​price, ​​as ​​well ​​as increased ​​trading ​​liquidity ​​for ​​existing ​​and ​​prospective ​​shareholders.
Read full article @ Marketwired

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>