The week in marijuana deals: WeedMD eyes beverages, Aurora closes CanniMed

MPX expands in Arizona and Hiku teams up with extraction company for oils. Here are a few deals you might have missed.

A relatively quiet week in weed closed with the revelation that Canadians reported paying less than $7 a gram for their marijuana. The data, crowd-sourced last month by Statistics Canada, is far from scientific. But it suggests that government hopes of selling cannabis for $10 a gram might be off base, at least if it wants to undercut the existing black market. On the deals side of the industry, here are a few you may have missed.

Drink and be Mary Jane

On Thursday, WeedMD Inc. announced its intent to partner with Phivida Holdings Inc. to create a joint venture called Cannabis Beverages Inc. CanBev will focus on cannabis-infused drinks, and WeedMD plans to turn part of its existing infrastructure in Strathroy, Ont. into a beverage production facility.

“WeedMD’s Strathroy facility will equip CanBev with extensive production infrastructure, including 25,000 sq. ft. of packaging area and cold storage, as well as adequate space to expand for future growth,” the company said in a press release.

Cannabis beverages won’t be legal in the first year of legal recreational use, but several companies, including Canopy Growth Corp., in partnership with alcohol company Constellation Brands Inc., are developing cannabis drinks with an eye to potential legalization of drinks and edibles in 2019.

For CanBev, WeedMD will supply the cannabis and distribute the product, while Phivida will focus on product development, research and branding.

Aurora closes on CanniMed

Six weeks after Aurora Cannabis Inc.’s hostile takeover of CanniMed Therapeutics Inc. turned friendly, the companies announced on Friday the deal has finally closed. As of Thursday, Aurora had received 70.7 per cent of CanniMed’s shares, exceeding the two-thirds required for the takeover.

“All of the conditions to the Offer having been met, Aurora will take up the tendered CanniMed Shares and pay for those shares as soon as possible,” CanniMed noted in a press release.

“Aurora will issue a total of approximately 50.6 million Aurora common shares and pay a total of approximately $98 million in cash for the CanniMed Shares tendered as of March 8, 2018.”

The deal, which was valued at over $1 billion when announced in January, is the industry’s largest M&A move to date.

Other Deals

MPX Bioceutical Corp. announced that it’s expanding its presence in Arizona, spending US$15 million in cash and shares to acquire several companies that run a dispensary, The Holistic Centre, in Phoenix, Ariz. “With the pending opening of our Apache Junction dispensary, the addition of the Holistic Center will bring the number of dispensaries managed by MPX in the greater Phoenix market to four, (and) will more than double our cultivation capacity…in the state,” the company said.

Hiku Brands Co. Ltd. announced a partnership with Vitalis Extraction Technology Inc. to construct an oil extraction facility in Kelowna.B.C. Hiku said its subsidiary DOJA Cannabis Ltd. has applied to Health Canada for an oil production licence. The equipment provided by Vitalis will be capable of processing up to 80 kilograms of cannabis flower a day into oil products, Hiku said in a press release.

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