The week in marijuana deals: Tilray brings Marley brand north, Canopy invests in LiveWell
Marijuana markets continued to sag last week, as investors bailed on high-risk stocks amid a broader market pullback. Things stabilized somewhat on Thursday and Friday after volatile trading earlier in the week. But across the board cannabis stocks continued their month-long trend downwards, as the market waits for catalysts like provincial supply announcements or significant M&A moves. Regardless of market activity, cannabis companies were busy executing on their branding, supply and product development strategies ahead of rec legalizations. Here are a few deals you may have missed last week.
Marley moves north
On Wednesday, Tilray Inc. announced plans to bring Marley Naturals, a branding partnership between its parent company Privateer Holdings and Bob Marley’s family, to the Canadian recreational market.
“This is a brand that already has tremendous name recognition,” said CEO Brendan Kennedy, noting the challenges of branding in the restrictive Canadian regulatory environment, which appears set to have plain packaging rules and limits on advertising.
Marley Naturals is one of seven U.S. rec brands, owned by Privateer, that Tilray is migrating to Canada. The company has launched a new subsidiary called High Park that will act as its Canadian recreational brand house. To feed High Park’s brands, Tilray is building a greenhouse facility in the Niagara region of Ontario as well as a processing plant in London, Ont.
MedReleaf Corp. also announced a new recreational brand this week: AltaVie. The brand is focused on the trendy urban consumer, and is the third recreational brand, after San Rafael ’71 and Woodstock, MedReleaf has announced.
Living well with Canopy
Canopy Growth Corp. and subsidiary Canopy Rivers Corp. announced an agreement with LiveWell Foods Canada Inc. to assist with the development LiveWell’s facilities in Ottawa and Pontiac, Que.
Canopy will provide LiveWell with genetics, assistance with growing operations and compliance, “and other strategic and financial support as needed,” according to a press release.
LiveWell is retrofitting one greenhouse facility and building a second, which “collectively represent over 1,500,000 sq. ft. of future cannabis production and processing infrastructure.”
The deal appears to be led by Canopy Rivers, a kind of third-party financing company closely linked to Canopy. Rivers uses a streaming model, where it provides financing to companies in return for product purchase agreements and sales royalties. Rivers’ investees agree to sell a portion of their crop at a set price, which is fed into Canopy’s brand and distribution network.
LiveWell has received an initial purchase agreement from Canopy, although it’s not clear for how much or at what price.
Other deals
Cannabis Wheaton Income Corp. is acquiring Dosecann Inc. for $38 million worth of Wheaton Income shares, the company announced Wednesday. Dosecann, which owns a facility in Charlottetown, P.E.I., is applying to become a “licensed dealer” under Canada’s Narcotic Control Regulations. Dealers licenses give companies the ability to develop cannabis-based products, like liquid concentrates, that aren’t legal yet in Canada. There are currently only 37 licensed dealers in Canada.
E-commerce company Namaste Technologies Inc. likewise moved to secure a dealers license. On Thursday, the company announced that it has entered into a non-binding agreement to acquire a 51 per cent stake in a numbered company based in Etobicoke, Ont., which will “undertake an application to become a Licensed Dealer.” It’s unclear how much Namaste is paying for the acquisition.
“The purpose of Namaste’s investment … is to facilitate research and development of medical cannabis extracts as well as for testing of imported medical cannabis products,” the company said in a press release.