Pot producer buys stock in dispensary chain https://thechronicleherald.ca/business/1429675-pot-producer-buys-stock-in-dispensary-chain
THE CHRONICLE HERALD
Published January 5, 2017 - 7:45pm
A Toronto-based medical marijuana grower is going to be a minority shareholder of the parent company that operates Cannabinoid Medical Clinics across Canada, including the one in Halifax.
Under the terms of a deal yet to go through all the regulatory approvals, Aphria Inc. bought six million Canabo Medical Inc. common shares at $1.40 each, a total of $8.4 million, last month to snag a 16.6-per cent ownership stake in the chain of medical marijuana clinics.
“Aphria is a producer that aligns well with Canabo,” Dr. Neil Smith, executive chairman of Canabo, said in a statement. “We are both committed to advancing research to support medical cannabis treatments, and their products are achieving excellent results with many of our patients.”
The 10 Cannabinoid Medical Clinics, which operate solely on referral from phsycians, include the Halifax clinic on Spring Garden Road. Seven of the company’s clinics are in Ontario, two are in Alberta and there is also one in St. John’s. The company’s website promises more clinics will open this year.
Aphria trades on the TSX Venture Exchange under the symbol APH and has a market capitalization of $580.55 million. Thursday, stock continued its weeks-long rally to close at $5.23.
Canabo Medical also trades on the TSX Venture Exchange under the CMM ticker. That company has a market capitalization of $26.5 million. Thursday, its stock closed up 3.53 cents to 88 cents.
Canabo Medical worked with Haywood Securities Inc., as lead agent, PowerOne Capital Markets Ltd., and Clarus Securities Inc. to clinch this deal, and paid a five-per-cent commission of the gross proceeds raised.
These agents have also been granted an over-allotment option to sell up to an additional 900,000 common shares at $1.40 per share, an option which may be exercised at any time until Jan. 21 next year.