Tilray To Acquire Natura Naturals Holdings For Up To C$70 Million Subject To Performance Milestones

CANADA: Tilray, a global leader in cannabis research, cultivation, production and distribution, announced it has entered into a definitive agreement to acquire all of the issued and outstanding securities of Natura Naturals Holdings, the parent company of a licensed cultivator of cannabis.

Tilray_LogoAs a result of the acquisition, if completed, Tilray will obtain Natura’s 662,000 square-foot greenhouse cultivation facility, of which 155,000 square-feet are currently licensed, and all subsequent cannabis output from this facility. Natura, through a wholly-owned subsidiary located in Leamington, Ontario, is a licensed cultivator under the Cannabis Act specializing in the greenhouse cultivation of cannabis.

Under the terms of the definitive agreement and subject to certain customary adjustments, Tilray will deliver C$35 million at closing, comprised of C$15 million in cash and C$20 million in Tilray Class 2 common stock. Natura shareholders will receive their pro rata portion of the C$15 million closing cash amount, after the deduction of certain transaction expenses incurred by Natura and subject to applicable withholding taxes. Upon Natura reaching certain quarterly production milestones over the following twelve-month period, up to C$35 million of Tilray common stock may become payable resulting in a total purchase price of C$70 million if fully achieved.

“We’re very pleased to have an agreement in place that allows us to expand our capacity to supply high-quality branded cannabis products to the Canadian market,” said Brendan Kennedy, Tilray President and CEO. “Through an extensive and thorough search for the right supply partner, we’re pleased to have come to a mutually-beneficial agreement with Natura.”

Tilray currently operates three state-of-the-art facilities in Canada and one in Portugal: Tilray Canada Ltd. (“Tilray Canada”), a Nanaimo, British Columbia-based research, cultivation and processing facility which primarily serves the Canadian and global medical cannabis market; Tilray Portugal, Unipessoal, Lda. (“Tilray Portugal”), located in Cantanhede, a research, processing, cultivation, packaging and distribution facility which will primarily serve the medical cannabis market in Europe; High Park Farms Ltd. (“High Park Farms”), an Enniskillen, Ontario-based cultivation and processing facility primarily serving the adult-use market in Canada; and the newly-licensed High Park processing facility in London, Ontario, which will exclusively serve the adult-use market in Canada. Tilray and High Park also have cannabis supply agreements in place with Licensed Producers throughout Canada and most recently signed an exclusive sale, supply, distribution and marketing agreement to deliver High Park adult-use cannabis products in Québec with ROSE LifeScience. The proximity of Natura’s facility to Tilray and High Park’s existing Ontario operations is expected to be valuable in the long-term collaboration of cannabis research, cultivation and processing within the Company.

Prior to signing the definitive agreement, Tilray conducted extensive due diligence on Natura’s cultivation facility and cannabis products. Prior to distribution, all cannabis products produced at the Natura facility will adhere to Tilray’s stringent quality assurance standards. The increased supply from Natura will allow Tilray to expand its capacity to supply the Canadian market with high-quality branded cannabis products.

The transaction will be completed by plan of arrangement under the Ontario Business Corporations Act. Completion of the transaction will be subject to customary terms and conditions, including shareholder and court approval of the arrangement. It is anticipated that the closing of the transaction will be completed within the next 30 days. Tilray looks forward to sharing more information related to the company’s increasing production capacity and global growth strategy, in the coming months.

Cowen provided a fairness opinion to Tilray’s board of directors in connection with the transaction.

LDB Issues Product Call For Non-Medical Cannabis

CANADA: The BC Liquor Distribution Branch (LDB) has issued a second product call as part of a continuing effort to expand its wholesale product assortment for non-medical cannabis.

In July, the LDB entered into memorandums of understanding with 32 licensed producers to form its initial wholesale product assortment to cater to the B.C. market directly following legalization of non-medical cannabis on Oct. 17.

“Now that we have finalized our initial product assortment, we’re looking forward to engaging with additional licensed producers that are interested in supplying the B.C. market,” said Blain Lawson, LDB’s general manager and CEO. “There are more and more licensed producers coming online, and we are committed to working with them to ensure our product assortment remains as competitive as possible in order to compete with the illicit market.”

Licensed producers are invited to make submissions for dried cannabis (including pre-rolls), cannabis oils, capsules and seeds that comply with federal requirements, across various product segments.

The product call opens on Aug. 13 and closes on Aug. 31. Product calls will be issued on a regular basis going forward. Submission documents are available to licensed producers HERE.

Tilray Announces Second Facility To Meet Rapidly Growing Global Demand For Medical Cannabis

CANADA: Tilray Canada Ltd., a global leader in medical cannabis research and production, has announced that it will invest, through an affiliated entity, up to $30 million in a second cultivation and processing facility located in Enniskillen, Ontario. The two facilities will generate a combined production capacity of up to 51 metric tonnes per year, which will position Tilray to respond to significant projected growth in demand for its medical cannabis products in Canada as well as the European Union, Australia, New Zealand and Latin America.

“This is another strategic milestone for Tilray as we aim to build the world’s most trusted and admired medical cannabis brand,” said Brendan Kennedy, Chief Executive Officer of Tilray. “As governments around the world increase access to medical cannabis, and as Canada prepares to legalize and regulate cannabis for responsible adult consumption, this investment will enable us to serve the rapidly expanding global market for quality-controlled, rigorously tested medical cannabis products.”

Expanded Capacity to Accelerate Tilray’s Global Expansion Plans

Tilray was the first licensed producer to legally export medical cannabis products from North America to the European Union, Australia, New Zealand and South America. Currently, Tilray products – including pharmaceutical-grade whole flower, oils, and capsules – are available in 6 countries spanning 4 continents. The company is aggressively expanding international distribution of its products with plans to export to 5 additional countries by the end of 2017.

In 2016, Tilray also became the first medical cannabis licensed producer in North America to be GMP-certified in accordance with the European Medicines Agency’s (EMA) Good Manufacturing Practice (GMP) standards. GMP certification is the most rigorous standard that manufacturers of medical products must meet in their production processes, and it provides regulators and health care providers in countries new to medical cannabis with certainty that Tilray products are a safe and smart choice.

Tilray’s Best-in-Class Production Facilities

Tilray currently owns and operates one of the world’s most sophisticated, federally-licensed medical cannabis cultivation and processing facilities, located in Nanaimo, British Columbia. The flagship $30 million facility, which opened in 2014 and achieved EU GMP certification in 2016, has the capacity to produce 8 metric tonnes of medical cannabis per year. It also houses a state-of-the-art extraction and R&D centre focused on processing raw flower into pharmaceutical-grade products like oils and capsules, in addition to developing new methods of delivery that provide alternatives to smoking.

The company’s second facility being announced today is located in Enniskillen, Ontario on a 100-acre property with 13 acres of existing greenhouse space. The property is currently producing peppers for the Enniskillen Pepper Company. Tilray has submitted an application to Health Canada to receive a federal license to produce medical cannabis on the Enniskillen site. In the first phase of the project, the property will house a 10-acre cannabis greenhouse facility and approximately 40,000 square feet of processing space. The facility marks a total capital investment of up to $30 million and, together with Tilray’s Nanaimo facility, is expected to generate a combined production capacity of as much as 51 metric tonnes by the end of 2018. In future phases to be completed over the next several years, the first 10 acres of Tilray’s new greenhouse in Enniskillen will be expanded up to 30 acres.

Tilray chose Enniskillen because the township is strategically located and has a strong workforce of qualified, skilled agricultural professionals. The Enniskillen facility is expected to hire approximately 50 people to work in operations, production, cultivation and facilities through the end of 2018. Over the next five years, the project is expected to create 200 to 250 full-time jobs in the region.

 

Legal Marijuana Cultivation Is Driving A Technology ‘Revolution’ In Industrial Agriculture

CANADA: Deep within a cedar forest in British Columbia, Dan Sutton is building what he hopes will be the most energy-efficient, high-technology greenhouse for growing cannabis. Spurred by the booming market for medical marijuana, he and a group of biologists and engineers have experimented for almost three years with digital sensors, lighting arrays, software programs and ventilators to design a greenhouse system with the lowest energy costs and highest crop yields.

“We said, ‘Let’s assume everything that’s ever been done in cannabis cultivation is wrong, and we have to build from the ground up,’” said Sutton, the 28-year-old managing director of Tantalus Labs in Vancouver.  “We have this broad realm of science that no one has been able to previously explore.”

The startup is among a growing number of companies in North America designing new products and systems specifically for the cultivation of cannabis, a finicky crop that needs a precise balance of light, moisture and water to thrive. Although these cannabis ventures aren’t exactly reinventing the wheel — greenhouse technologies have existed for decades — they are injecting the kinds of capital and brainpower into the field of industrial agriculture that simply wasn’t there a decade ago.

 

B.C. College Of Physicians Warned New Rules For Medicinal Marijuana Could Spark Legal Challenge

CANADA:  Two Vancouver lawyers who specialize in marijuana have warned that the College of Physicians and Surgeons of B.C. may have put itself at risk of litigation when on May 5 it revised how doctors should counsel patients on medicinal cannabis.

In separate interviews, Kirk Tousaw and John Conroy told the Straight a memo sent to B.C. doctors could result in a court challenge that argues the new rules violate the Canadian Charter of Rights and Freedoms.

Tousaw said the implications could be national. “It’s quite likely something that puts the entire Health Canada program of using physicians as gatekeepers to the lawful possession of cannabis into peril,” he explained.

The memo states that medicinal marijuana is “not appropriate” for patients under the age of 25, for those who have a history of psychosis or a substance-use disorder, or for anybody with a cardiovascular or respiratory disease. It is an official college “standard”, according to the regulator’s website, which means it reflects “relevant legal requirements” that are enforced under the province’s Health Professions Act.

Vancouver’s Marijuana Museum Is Cashed Out

CANADA:  Puff, puff, pass: Vancouver’s very own homage to the art and history of pot has closed up shop.

The Herb Museum, located in the B.C. Marijuana Party building on West Hastings–”in the famous Pot Block of ‘Vansterdam’” as they describe–has opted to pack it in to make room for a seed sanctuary.

Launched a decade ago, the museum’s David Malmo-Levine, told Vancouver 24hrs of late they were getting about a dozen visitors daily to their five rooms of exhibits boasting over 1,200 artifacts.

The Herb Museum has sold off much of their collection on pot and herbal medicine to a forthcoming marijuana museum opening in Detroit, Michigan. On Facebook, The Herb Museum explained to fans that the collection will be “installed in a much larger location where it will be exposed to much more traffic” than they were getting Vancouver.

 

Safety First: Are Security Requirements For Legal Pot Grows Enough?

WASHINGTON:  Washington state’s new pot grow operations have state-required alarm systems, dozens of cameras and tall fences. But some growers said they aren’t worried about theft and violence.

Should they be?

Pot farmer Susy Wilson doesn’t like keys and locks much. Wilson’s farm is in the Columbia Gorge. She’s not too security driven in her life, but at her pot farm she doesn’t have a choice.

“My feeling is that if people are coming in with guns a blazing then I need to get out,” Wilson said. “Otherwise, what is it that I have to worry about? Someone crawling over the fence and stealing a bud?”

 

Legalized Marijuana In Washington Could Hurt B.C.’s Multibillion-Dollar Pot Economy

CANADA:  B.C’s massive pot industry is in for some tough times because of changes in U.S. marijuana policy and a shrinking market south of the border.

The changes have raised questions about whether B.C.’s economy will take a hit.

Washington state’s liquor board is expected to issue the first wave of retail marijuana store licences on July 7, with some of the 334 outlets set to open the next day. Pot growers for recreational marijuana already operate legally in Washington state. Colorado began allowing the sale of recreational pot on Jan. 1.

Marijuana sales haven’t started in Washington but the effects of the loosened drug laws are already being felt in B.C., said Simon Fraser University criminologist Neil Boyd.

 

Sensible B.C.’s Campaign For Marijuana Referendum Fails

CANADA:  There was plenty of smoke, but ultimately no fire for Sensible B.C.

Campaign organizer Dana Larsen confirmed Sunday that the Citizen’s Initiative for a referendum on decriminalizing marijuana possession has failed ahead of Election B.C.’s Monday deadline.

“We’re not going to make it,” said Larsen. “We’ve very proud of our team of canvassers and what we accomplished. 200,000 signatures is still a remarkable feat.”

Larsen and his team needed to collect the signatures of 10 per cent of registered voters in every single one of B.C.’s 85 electoral districts in a 90-day period for the initiative to be a success.

Organizers had a sense the campaign was failing, but it became clear Sunday that it was doomed as final counts were being tallied.

“We’re not done counting yet and there are last-minute signatures coming in, but it looks like we reached the threshold in about two dozen ridings,” said Larsen.

That’s well shy of the 85 required, though Larsen claims the sheer volume of signatures collected amount to two-thirds of their goal.