Tilray Completes Merger With Privateer Holdings

TilrayPrivateerCANADA: Tilray, Inc., a global pioneer in cannabis research, cultivation, production and distribution, today announced that the merger with Privateer Holdings, Inc. closed on December 12, 2019.
 
Mark Castaneda, Chief Financial Officer of Tilray, said: “We appreciate the long-term confidence that Privateer has in the Tilray business and we look forward to having their investors as part of our stockholder base. We believe this transaction will give Tilray greater control and operating flexibility, while allowing us to effectively manage our public float.”
 
Pursuant to the merger, all of Privateer’s capital stock outstanding immediately prior to the effective time of the merger (excluding certain shares) were cancelled and automatically converted solely into the right to receive the applicable portion of an aggregate shares of Tilray Class 2 common stock and shares of Tilray Class 1 common stock (inclusive of shares of Tilray Class 2 common stock held in escrow for contingent release to Privateer’s stockholders) issuable as consideration in merger.  Tilray did not pay any cash consideration in connection with the merger.

As previously disclosed, each Privateer equity holder who received the shares of Tilray stock in the merger is subject to a lock-up allowing for the sale of such shares only under certain circumstances over a two-year period. During the first year following the closing of the merger, shares will be released only pursuant to certain offerings or sales arranged by and at the discretion of Tilray. At the end of the first year, to the extent not already released at Tilray’s discretion as a result of the aforementioned offerings or sales, 50 percent of the total shares subject to the lock-up will be released. Over the course of the second year following closing, the remaining shares will be subject to a staggered release in four equal quarterly increments.

Tilray Increases Cannabis Supply With Acquisition Of Natura Naturals Holdings

CANADA: Tilray, a global leader in cannabis research, cultivation, production and distribution, announced the closing of a previously announced definitive agreement to acquire all of the issued and outstanding securities of Natura Naturals Holdings, the parent company of a licensed cultivator of cannabis. Moving forward, the Natura facility will operate under the name High Park Gardens and serve as an additional cultivation facility to serve the medical and adult-use market in Canada.

Tilray_LogoAs a result of the finalized acquisition, Tilray and High Park have obtained the 662,000 square-foot greenhouse cultivation facility, of which 155,000 square feet are currently licensed. There are also options to expand the facility to further increase production capacity. Natura, through a wholly-owned subsidiary located in Leamington, Ontario, is a licensed cultivator under the Cannabis Act specializing in the greenhouse cultivation.

Under the terms of the definitive agreement and subject to certain customary adjustments, Tilray delivered 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 add High Park Gardens to our growing global footprint” said Greg Christopher, EVP Operations. “This acquisition marks another milestone in building a strong supply chain to give Canadians safe access to quality tested cannabis medicine and products.”

Done Deal: Helix TCS And BioTrackTHC

COLORADO: Helix TCS, in conjunction with its strategic capital partner, Rose Capital, completed the closing of its merger with BioTrackTHC on June 1st.  Zachary L. Venegas will continue as the CEO of Helix TCS, and will assume the role of Executive Chairman for the combined company.  Patrick Vo will continue as CEO of BioTrack.

“The closing of this merger is a landmark event for Helix and BioTrack from a strategic and operational perspective. As a combined company, we are unique in the industry in serving virtually every segment of the market – whether it is compliance software through BioTrack, the wholesale marketplace through Cannabase, security, transport, or cash services through Helix, or the advisory that we can provide customers due to our data infrastructure.  We continue to support our clients in whatever challenges they face in becoming safer, stronger, and more profitable, whether they operate in the U.S. or internationally.  At the same time, investors will see margin improvement as reporting and administrative costs are spread across a much larger revenue base and costs are rationalized.

“As a combined company with $12MM in 2017 revenue, we will continue to generate greater value for clients and shareholders. Helix’s unrelenting focus on strategy and disciplined execution will allow Biotrack to further harness the spirit that made it a market pioneer, with significant market share in government, dispensary, and grow segments of the seed to sale market, and translate that spirit into renewed technological innovation and leadership.

“This transaction represents the next step in our evolution as a market leader.  It is also another milestone achieved by using our team’s deep experience in strategy, entrepreneurship, M&A, and frontier markets to build a world-class company,” stated Mr. Venegas.

M&A Activity Heats Up In The Cannabis Industry

NEW YORK: Merger and acquisition (M&A) activity in the cannabis industry is heating up, and market analysts point to several important factors contributing to increased activity.

Profit is always a central issue, and as the founders of companies established years ago seek attractive exit strategies, new players are considering ways to enter the field in a profitable way. The rapid evolution of technology and its increasing application also serve as catalysts for M&A, as larger companies pursue opportunities that are positioned for current or near-term commercial availability. Such expertise and assets developed by smaller brands could potentially turn them into attractive targets for M&A activity.

As Canada prepares to legalize the recreational use of marijuana next summer, the push for M&A becomes even greater. Since the beginning of the fourth quarter of 2016, an average of approximately 3.2 deals have been closing per week well into 2017.  In comparison, the average for the same period one year ago was approximately 1.4 deals. Analysts note an increase in interest from Canadian companies that wish to cross the border to become a part of the U.S. cannabis industry.

Generally, M&A activities focus on companies and facilities that already have well-developed positions in the field. In 2017, one of the oldest marijuana dispensaries in Denver sold to a Colorado enterprise . The fate of the two-best selling marijuana retailers in Washington was similar. The initial price tag set for the two businesses was $50 million. Developments on the Canadian market have also been pretty dynamic in 2017. The trend will potentially be upheld in the year to come and strategic interest will fall on innovators in the field of cannabis extraction and CBD oil delivery.