In this market news, 48North Cannabis Corp. (TSXV:NRTH), one of the Canadian marijuana stocks, said it is set to acquire Good & Green in an all-stock transaction
SmallCapPower | November 1, 2018: 48North Cannabis Corp. (TSXV:NRTH), one of the Canadian cannabis stocks, Tuesday announced that it has signed an agreement to acquire privately-held Good & Green in an all-stock transaction valued at C$18 million. Good & Green is an organic cannabis company that operates from a 46,000 square foot indoor facility situated on five acres of land in Brantford, Ontario. Good & Green has also applied for a cultivation license for its 100-acre farm in southwest Ontario, which is capable of producing at least 40,000 kg of dried cannabis, with production anticipated by the early spring of 2019.
With this acquisition, 48North Cannabis has positioned itself as one of the largest and lowest cost producers of dried cannabis, cannabis oil.
48North Cannabis CEO Alison Gordon said, “We are excited to acquire Good & Green, a company that shares our corporate values, strong management, and commitment to financial discipline. With now two licensed facilities, we are optimally positioned for the next phase of cannabis legalization with extensive cultivation experience in large-scale, low-cost production.”
Through this acquisition, 48North Cannabis will have total expected 2019 production of 45,000 kilograms of high-quality dried cannabis, post receipt of applicable regulatory approvals. The total production encompasses 48North’s existing 2019 indoor expected production of 2,500 kilograms from DelShen Therapeutics Corp., the Company’s existing wholly-owned Licensed Producer.
The acquisition will be through a three-cornered amalgamation whereby 48North Cannabis will acquire 100% of Good & Green’s outstanding common shares from Good & Green’s shareholders in exchange for C$18 million of common shares (totaling 24,567,534 common shares) of 48North at a price of C$0.73 per common share. 48North Cannabis and Good & Green have agreed to a mutual break fee of C$750,000. The acquisition is expected to close on or before November 30, 2018, subject to necessary approvals.
48North’s acquisition of Good & Green will augment as well as diversify the portfolio of high-quality cannabis brands. The broadening of its product portfolio will enhance accessibility to various demographic segments through complimentary values-driven brands including 48North, Good & Green, Latitude and Mother & Clone.
Post acquisition, Alison Gordon and Jeannette VanderMarel will become co-CEOs of 48North Cannabis. Ms. VanderMarel will also join the Board of Directors of 48North Cannabis. Daniel Goldberg will become Senior Advisor of 48North Cannabis and will focus on strategy, business and corporate development, strategic partnerships, communications, as well as investor and government relations. Ms. VanderMarel is the co-founder of The Green Organic Dutchman Holdings Ltd. (TSX:TGOD), while Mr. Goldberg was formerly a Senior Vice President with Macquarie Capital Markets Canada.
48North Cannabis also announced a C$10 million non-brokered private placement of units, including an approximately C$7 million lead order from a leading US-based private investment fund.
48North Cannabis cultivates premium dried flower to create next-generation cannabis products for the health and wellness market. The Company’s stock currently trades at a market capitalization of C$42.18 million on the TSXV with a price-to-book multiple of 1.67x.
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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