Cannabis Professional’s daily roundup of industry news. View archive here.
CannTrust has terminated an exclusive broker agreement with a subsidiary of Breakthru Beverage Group, less than two weeks after CannTrust halted all sales. Cannabis Pro’s Jameson Berkow has details on Canopy Growth’s sale of a Kelowna, B.C., property to GTEC. Meanwhile, High Tide has leased a warehouse in Las Vegas for U.S. wholesale and e-commerce operations. And, according to a report from Reuters, developing a medical marijuana regime is one of the top priorities of the new government in Thailand.
– Mark Rendell
CannTrust ends exclusive partnership with Breakthru subsidiary
CannTrust Holdings Inc. has terminated its exclusive broker arrangement with Breakthru Beverage Group subsidiary Kindred Partners Inc. The move comes less than two weeks after CannTrust halted all sales, amid an investigation by Health Canada into illegal growing activity.
In a short news release on Monday evening, CannTrust said that the decision “to waive the exclusivity provision” was the “result of months of discussions.”
“It is expected that this revised arrangement will over time allow CannTrust to reduce the expenditures incurred by CannTrust under the Brokerage Agreement,” the company said.
Breakthru, one of Canada’s largest alcohol distributors, launched Kindred last fall to act as the brokerage arm for CannTrust. Breakthru also invested $9.2-million in CannTrust, buying 902,405 common shares at $10.23 per share. CannTrust are now trading at $3.56.
In a news release last September, Breakthru Beverage Group Vice-Chairman Danny Wirtz, said, “we’re excited to work with the most respected producer in Canada and leverage our well-established business model, which will put us at the forefront of shaping a high performing organization and socially responsible industry.”
Rare cultivation asset sale from Canopy Growth
Canopy Growth is selling an indoor cannabis cultivation facility in British Columbia’s Okanagan Valley for $13-million, the country’s largest marijuana grower confirmed Monday afternoon.
Kelowna, B.C.-based GTEC Holdings, which currently owns two licenced cultivation facilities in Alberta and Ontario, announced its plan to acquire the facility from Canopy earlier Monday. Located on Alcan Road, just 8 km from its own Dickson Avenue headquarters, GTEC intends to spend another $2-million finishing the facility which, once licensed, is expected to yield 4,000 kg of dried cannabis flower a year.
The deal value is relatively small, though Canopy’s position as the seller makes it noteworthy. Under former co-CEO and co-founder Bruce Linton, Smiths Falls, Ontario-based Canopy was among the most acquisitive companies in the legal cannabis industry.
The company only rarely sold assets during Mr. Linton’s tenure. Two weeks ago, Mr. Linton was fired from Canopy following clashes with Constellation Brands CEO Bill Newlands over his aggressive acquisition strategy. New York-based Constellation - maker of Corona Beer and Robert Mondavi wines - is the cannabis company’s largest shareholder.
Canopy originally acquired the Kelowna facility as part of its $250-million deal to buy Tokyo Smoke parent company Hiku Brands in July 2018, spokesperson Caitlin O’Hara said via e-mail. It has never been licensed for cannabis production, Ms. O’Hara said, though GTEC expects to win Health Canada approval by early 2020.
Asked when Canopy originally put the facility up for sale, Ms. O’Hara declined to answer.
– Jameson Berkow
High Tide signs lease on Las Vegas warehouse for wholesale/e-commerce
High Tide Inc. has signed a fiveyear lease on a warehouse in Las Vegas which will act as its U.S. distribution hub, the company said Tuesday.
The Alberta-based cannabis retailer and smoking accessory company plans to use the 25,000-square-foot warehouse for wholesale operations related to its RGR Canada and Famous Brandz product lines, as well as for e-commerce operations.
“Establishing a warehouse to store and distribute smoking accessories, cannabis lifestyle items and CBD products in Nevada is a natural next step for High Tide since the Las Vegas area is also home to the highest number of smoke shops per capita in North America,” said High Tide CEO Raj Grover in a news release.
Cannabis among top priorities for new Thai government
Developing a medical cannabis industry is among top policy priorities for Thailand’s new government, according to a document released before the formal announcement.
Prime Minister Prayuth Chan-ocha, the former junta leader who heads a civilian government following March elections, is due to set out the policies for debate in the national assembly on Thursday. The policy document was released on Sunday.
Developing the medical cannabis industry was a key demand of the Bhumjaithai party, one of the biggest parties in Prayuth’s 19-party coalition.
“The study and technological development of marijuana, hemp, and other medicinal herbs should be sped up for the medical industry to create economic opportunity and income for the people,” the policy document said.
Thailand, which had a tradition of using cannabis to relieve pain and fatigue, legalized marijuana for medical use and research last year.
Bhumjaithai party leader Anutin Charnvirakul, now a deputy prime minister and health minister, said his goal was to enable all Thais to grow marijuana to make money.
Anutin told local media it was important to remove hemp with a high level of cannabidiol (CBD) from the list of banned drugs for cultivation and then to free up hospitals to prescribe drugs containing the chemical compound.