This Week in Weed: Trash, Diversity and a Million-Dollar Deal

Article by Angela Stelmakowich, Growth Op

Share via email Share on Facebook Share on Twitter Open more share options Breadcrumb Trail Links World News Wellness Sports News Legalization Experts Celebs Business This week in weed: Trash, diversity and a million-dollar deal A Quebec company is on its way to becoming a top-three recreational producer, a Nova Scotia business kicks trash away from the curb and a former NBA All-Star cites the need for diversity. Author of the article: Angela Stelmakowich It was a busy week on the cannabis front with everything from mergers and acquisitions activity to capitalizing on meaningful synergies by trying to disrupt the status quo on weed-related waste.

It was a busy week on the cannabis front with everything from mergers and acquisitions activity to capitalizing on meaningful synergies by trying to disrupt the status quo on weed-related waste.

Deal of the week

HEXO Corporation and Zenabis Global Inc. have entered into a definitive agreement that, as proposed, would see the former acquire all of the latter’s issued and outstanding common shares.

Valued at $235 million, the all-share transaction means Zenabis shareholders will receive 0.01772 of a HEXO common share in exchange for each company common share held, notes a joint statement from the two companies.

Previously approved by each company’s Board of Directors (BoD), the deal lays the groundwork for becoming a major cannabis player.

If recent financial results are any indication, “the combined organization would be a top-three licensed producer in terms of combined Canadian recreational cannabis sales,” the statement notes.

HEXO would further benefit by securing a foothold in the European medical cannabis market via Zenabis’ local partner there, as well as gain access to “licensed capacity to produce approximately 111,200 kilograms of additional high-quality cannabis annually,” the company reports.

That access “provides a platform for growth and foundation from which to strengthen and diversify our portfolio of brands,” HEXO notes. “HEXO’s growth strategy includes expanding our global presence, and this acquisition is an important step in that direction,” says Sebastien St.-Louis, CEO and co-founder of HEXO, a consumer-packaged goods cannabis company.

The Zenabis BoD has unanimously recommended moving forward, but shareholders still need to okay the intended transaction, voting at least two-thirds in favour of such a move. The proposed deal also needs certain regulatory, court and stock exchange approvals.

Cannabis profits continue to rise

Ongoing concerns and restrictions related to COVID-19 have sparked a change in alcohol and cannabis purchasing, reports the Nova Scotia Liquor Corporation (NSLC), which witnessed a 14.3 per cent hike in earnings for the third quarter of 2020 compared to the same period in 2019.

The NSLC earned $74.9 million for the quarter, which ran from Sept. 28 to Dec. 27, 2020. Of the $210 million in sales, a 13.2 per cent hike over the same quarter of 2019, alcohol beverages remained king. They accounted for $187.8 million of the total, while cannabis sales were $22.2 million, according to the NSLC, which manages the sale of beverage alcohol and cannabis in the province.

But cannabis stood out in terms of growth in sales. Comparing Q3 figures for 2019 and 2020, sales of alcohol beverages climbed 11.7 per cent, less than half of the 27.5 per cent for cannabis sales.

Retail customer transactions for cannabis rose 2.6 per cent and the average dollar value per transaction ballooned 24.2 per cent to $41.48.

“The NSLC added six new cannabis stores to the network and the cannabis market is maturing, which has resulted in a 23 per cent decrease in the average price per gram, to $7.58, and a stable supply of the larger package sizes customers are seeking,” the agency reports.

“This growth in cannabis sales indicates we are making progress in fulfilling our mandate to impact the illicit market with a safe, secure supply of cannabis,” suggests NSLC president and CEO Greg Hughes.

‘Waste not, want not’ becomes a reality with 100 per cent reclaimed ocean plastic

Brooklyn, N.S.-based Aqualitas is cementing its commitment to keep cannabis sustainable through a new partnership that it reports will make the company the first Canadian licensed producer with packaging made from 100 per cent reclaimed ocean plastic. In fact, its first packaging order reclaimed two tons (1,814 kilograms) of plastic from the ocean.

The teaming with Colorado-based Sana Packaging is positioned as a disruptive move — in the best of ways — for the Canadian market, suggests a statement from the organic producer. The idea behind the move is to help Aqualitas, which is already a low-energy and low-water consumer, do its part to tackle head-on the ongoing and pressing problem of cannabis packaging.

Two years in the making — from raw material sourcing through product certification — the company aims to offer sustainable packaging across all recreational and medicinal product offerings.

“It stemmed from biodegradable pouches and labels to an ocean plastic concept,” explains Josh Adler, the company’s director of operations. “Biodegradable formats are now in stream for all SKUs (stock-keeping units) and further facility efforts are in the works to lower our carbon footprint,” Adler says.

What products will be first to provide the new packaging? Coast to coast, the first offering will be via the company’s medical platform in five-gram jars, while its home province of Nova Scotia will host the recreational market launch via Reef Organic later this month, Aqualitas reports. The new packaging and cultivar Coastal Kush is set to be introduced in Ontario in early March.

“As members of a coastal community, it’s no longer enough for us to simply keep packaging out of our oceans and landfills. We want to play an active role in cleaning it up,” Aqualitas CEO Myrna Gillis notes in the statement.

Pharma company expands ability to develop weed-based drugs

After many years of groundwork, Ontario-based MediPharm Labs Corporation has positioned itself for what it calls “an essential part of the pharmaceutical industry supply chain” thanks to its receipt of a Cannabis Drug Licence (CDL) from Health Canada.

The licence allows the company to “manufacture and supply drugs that contain cannabis,” including pharmaceutical prescription drugs that must have a Drug Identification Number (DIN), reports the company, which specializes in research-driven cannabis extraction, distillation and derivative products.

That ability positions MediPharm Labs to be able to supply cannabis-based pharmaceutical drugs and active pharmaceutical ingredients to other CDL licence-holders and clinical research trials.

And that may prove critical given the marked uptick in cannabis-related research.

Beyond enhancing efforts with the company’s existing customers, the CDL licence opens “the door to working with additional large and smaller pharma companies to produce existing approved cannabis drugs or develop and manufacture new and innovative drugs through later-stage clinical trials,” company president and interim CEO Keith Strachan reports.

Nothing but net for former NBA star Chris Webber

Five-time NBA All-Star and weed entrepreneur Chris Webber is looking to make a difference off the court by partnering with J.W. Asset Management, LLC and firm founder Jason Wild to launch a US$100 million private equity cannabis fund.

Read the full article here.

About Dankr NewsBot

Beep Boop. I'm just a bot who brings you the dankest news in the biz

Leave a Reply

Powered by Dragonballsuper Youtube Download animeshow