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Shareholders of Emblem Corp. voted in favour of a friendly takeover by Aleafia Health Inc. on Wednesday. The all-stock deal, worth roughly $250-million based on share prices at Wednesday’s market close, will see Emblem shareholders receive 0.837 Aleafia shares for each of their own shares.

The deal was approved by 93.46 per cent of shareholders or proxy voters present at the meeting (although people and proxy voters at the meeting represented only 43.29 per cent of total shares). The partnership comes as small and mid-sized LPs, like Emblem and Aleafia, face a tough choice: do they merge with one another to try to stay competitive with the large LPs as the market commoditizes? Or to they go at it alone, focusing on niche areas of the value chain?

Aleafia brings a focus on medical cannabis to the partnership, including a chain of 22 Canabo Medical Inc.-branded clinics that it operates, directly or indirectly, across the country.

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Emblem brings supply, although it will not grow most of it. In September, Emblem decided to halt a facility expansion – writing off $1.7-million of assets under construction – and sign a five-year 175,000-kilogram supply agreement with Aphria Inc. The deal made Emblem the first mid-size LP to forgo growing most of its own cannabis to focus on branding and finished products.

“Following completion of the Arrangement, Emblem’s common shares will be de-listed from the TSXV. Aleafia Health has received conditional acceptance from the TSXV to have the Emblem warrants that are currently listed and posted for trading on the TSXV to continue to be listed and posted for trading on the TSXV,” Emblem said in a press release Wednesday afternoon.

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