ACB LEAF dealThe larger question for me is why is MedReleaf on the block in the first place? We've all read the glowing analysts’ reports and touted valuations. Although in hindsight, this announcement does explain LEAF's lack of commercial activity in securing new markets.
If LEAF's strategy all along was to incubate a startup and cash-out early then why choose ACB as a suitor given its overextended cash position? Any agreement would surely involve some form of share split that would serve to further dilute ACB shares and add risk to both companies. Any contemplated premium would need to account for this added risk and LEAF shareholders should be vigilant to ensure they are adequately compensated for this additional risk beyond the market valuation.
Lastly, I have long complained about MedReleaf's seeming unwillingness to pursue commercial deals and grow its revenues while others in the pack seem to announce new sales agreements every other day. Indeed LEAF's focus appears to be on enriching insiders in the very short-run through equity awards at the expense of its shareholders. For example - Gimelshtein's 4.7 million dollar share award. This award is particularly puzzling given Igor's 10 months of service with the company, the award was made while net revenues are on the decline, and not so long ago he was a teaching assistant at a local university. Such a deal would have to be sanctioned by the board, which Lloyd Segal sits as chair. Why the gift? I will say - if this is the kind of management and corporate governance we can continue to expect with the current slate, then it's good riddance to them all and we should welcome a change to more business minded organization.