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Cannabis Professional’s daily roundup of industry news. View archive here.

Zenabis raises $20.8-million from discount rights offering

Zenabis Global Inc. raised $20.8-million in a rights offering that closed this week. The offering, made at $0.15 per common share, allowed existing shareholders to buy additional stock.

“To see an over-subscribed rights offering is a strong vote of confidence from the market,” said CEO Andrew Grieve in a statement on Thursday.

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The deal, however, was incredibly destructive to Zenabis’ share price. Common shares were priced at a 73 per cent discount to where Zenabis shares were trading in late October. This caused the price of Zenabis stock to drop sharply when the deal was announced on Oct. 24. Shares are now trading 58 per cent lower than before the deal was announced.

"I understand that investors are getting hit very hard,” Mr. Grieve said in an interview in October.

“Our strong preference was to take equity rather than debt. Given we are investors and we all own a share of this business, and the founders and some of the senior leadership have all written seven-figure cheques to the company, and are putting in additional capital, we did not want to be in a position where we took on greater financial risk, in combination with operational ramp-up risk," he said.

– Mark Rendell

Canopy signs five agreements with Ont. lottery winners for Tokyo Smoke stores

Canopy Growth Corp. has signed agreements with five winners of Ontario’s second retail lottery, the company said on Thursday. The stores – in North Bay, Cambridge, Thunder Bay and two in Toronto – will be run under the Tokyo Smoke brand.

“Increasing our presence in Toronto and for the first time north of the GTA is an important step to continuing the growth of the Tokyo Smoke brand," said CEO Mark Zekulin in a news release.

Two of the five locations have entered the 15-day notification period, which ends on Dec. 15, according to the AGCO website.

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- Mark Rendell

Aleafia begins white-label oil production for Australian client

Aleafia Health Inc. has begun producing white label cannabis oil for an Australia client, the company said Thursday. The company did not say how much cannabis oil it produced for Melbourne-based Montu Group Pty. Ltd, but it said the deal was the first for Aleafia’s “newly launched international white label production service.”

“All necessary import permits from the Australian Department of Health have been secured, and the shipment is expected to be completed in late 2019, following receipt of necessary Health Canada export permits,” the company said.

- Mark Rendell

Hexo launches Original Stash in Ontario for Black Friday

Hexo Corp. is launching its discount brand Original Stash in Ontario on Friday as part of a Black Friday marketing campaign. The one-ounce SKU of mid-THC Indica flower is pitched as being competitive with black market prices. It sells for $125.70 or $4.49 per gram in Quebec.

“The Ontario Cannabis Store is poised to make Original Stash available on its webstore and to all licensed retailers in the province, who can in turn choose to carry the brand. HEXO’s Original Stash will be the first brand to be featured as part of the Ontario Cannabis Store’s inaugural homepage holiday campaign, in conjunction with Black Friday,” Hexo said on Thursday.

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- Mark Rendell

Sundial appoints Zachary George to board of directors

Sundial Growers Inc. has appointed Zachary George, co-founder of FrontFour Capital, to its board of directors. The appointment brings the total number of Sundial directors to seven.

Mr. George “currently serves as a trustee and director on the boards of Cominar REIT and Trez Capital Junior MIC. He previously served as the Chairman of the boards of FAM REIT and Huntingdon Capital Corp., as the lead independent director of both Cornell Companies Inc. and PW Eagle Inc., and on the boards of Allied Defense Group Inc. and IAT Air Cargo Facilities Income Fund,” Sundial said in a statement on Thursday.

Mr. George will be the chair of a newly formed Operations and Capital Committee.

- Mark Rendell

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