IMC Holdings Acquires Medical Cannabis Network For $4.6M

CANADA:  IMC Holdings Ltd. has acquired the outstanding ordinary shares of R.A. Yarok Pharm Ltd., Rosen High Way Ltd. and High Way Shinua. Ltd. accelerating IMC’s execution of its vertical integration strategy within the Israeli retail market.

On July 28, 2021, IMC Holdings concurrently executed definitive share purchase agreements to acquire all of the outstanding ordinary shares of each of (1) Pharm Yarok, a leading medical cannabis pharmacy located in central Israel; (2) Rosen High Way, a trade and distribution centre providing medical cannabis storage, distribution services and logistics solutions for cannabis companies and pharmacies in Israel; and (3) HW Shinua, an applicant for a medical cannabis transportation license from the Israeli Medical Cannabis Unit (IMCU).

The receipt of which would permit HW Shinua to transport large quantities of medical cannabis to and from Pharm Yarok’s pharmacy and Rosen High Way’s distribution centre and to and from third parties in the medical cannabis sector, including medical cannabis growing facilities, pharmacies, manufacturers and distribution centres across Israel.

The aggregate consideration for the acquisition is approximately $4.6 million in cash, of which $1.3 million shall be invested in IMC in consideration for IMC’s equity by the shareholders of Pharm Yarok, Rosen High Way and HW Shinua.

The collective current annual revenue run rate of Pharm Yarok, Rosen High Way and HW Shinua is approximately $8 million with an expected positive EBITDA of approximately $1 million.

“The Israeli medical cannabis market continues to grow and evolve very rapidly. Pharm Yarok is one of the leading medical cannabis retailers in Israel, selling approximately 1,000 kg of medical cannabis per year and serving over 2,000 patients per month. The Acquisition significantly advances our retail expansion strategy, initiated earlier this year through the acquisition of Panaxia-to-the-Home’s distribution and in-house pharmacy activities,” said Oren Shuster, CEO of IMC.

“We expect that the continuation of our vertical integration strategy will increase our purchasing power with suppliers, create potential synergies with our established call centre and online operations and provide for additional margin on direct sales and up-sells across a growing range of products. We welcome the Pharm Yarok and Rosen High Way management teams and employees, along with their expertise in retailing and branding.”

Upon Closing, the acquisition is expected to integrate assets that include a license to sell medical cannabis to patients (including the ability to sell online), a large customer service centre, a virtual store and online properties, intellectual property, a logistics and warehousing centre with specialized storage space for over 350 kg of medical cannabis as well as a large customers.