Cannabis Professional’s daily recap of industry news. View archive here.
Just a couple of items to kick off this Tuesday morning in marijuana: Green Growth Brands is spending more than US$300-million to expand its access to the THC side of the sector and a Toronto suburb is blocking plans for a big outdoor cannabis and music festival that was due to take place in Vaughan next month as the debate over what the end of prohibition means for social cannabis consumption grows ever-louder.
– Jameson Berkow
Green Growth to pay US$310-million for Moxie to move beyond CBD
Ohio-based Green Growth Brands is moving deeper into the intoxication side of the cannabis industry with a US$310-million deal to acquire Moxie Cannabis parent company MXY Holdings.
The all stock-based deal announced Tuesday morning will give Green Growth, backed by the billionaire Schottenstein family, access to a multi-state operator focused on cannabis extract based products to compliment the company’s existing CBD-based Seventh Sense product line. Moxie Cannabis primarily sells THC-based vape pen cartridges, resin and shatter in more than 250 dispensaries spread across California, Michigan, Nevada, Arizona, Pennsylvania and New Jersey.
Canaccord Genuity and Eight Capital provided fairness opinions to the boards of Green Growth and MXY respectively and the transaction is expected to close within the next six months. Once complete, the terms call for key members of Moxie’s management team to join Green Growth under a new Ontario limited partnership that will hold both company’s assets.
Moxie also has an existing cash balance of US$39-million, which will allow the newly combined entity to maintain an aggressive pace of expansion. Green Growth recently announced distribution agreements with DSW shoe stores and Abercrombie & Fitch and is also planning to expand its network of Seventh Sense Botanical Therapy shops from 61 currently to more than 200 by the end of 2019.
Not all of Green Growth’s acquisitions have gone smoothly in the past, however. In April, the company’s $2.8-billion hostile attempt to acquire Canadian licensed cannabis producer Aphria expired and the company ended up buying back $89-million worth of its own shares instead.
New Vaughan by-law kills plan for cannabis and music festival
Sunday, August 25 will be much quieter in Boyd Conservation Park than it was expected to be as recently as 24 hours ago.
The Journey Cannabis & Music Festival was set to take place on that date in the park just north of Toronto, but what was billed as Canada’s first major cannabis-focused public festival is no longer set to proceed. Organizers say they had signed agreements with the Toronto Region Conservation Authority and Boyd Conservation Park to move forward, but in mid-May Vaughan council passed a new by-law (074-2019) banning all non-medical public cannabis consumption.
“We had no advance warning this by-law was in the works," Murray Milthorpe, chief experience officer of the Festival, said in a statement. “We provided senior city officials the opportunity to review our press release prior to launch as requested [but] we never received a response.”
"Policymakers in Canada should welcome all efforts by multi-stake holder groups to educate Canadians about the legal vs illegal market, the health and safety aspects of consuming cannabis, and the dangers of substance abuse,” Mr. Milthorpe said. “Sadly, Vaughan City Council is on the wrong side of history here.”
The issue of public and social consumption of cannabis has emerged as one of the most challenging issues to arise from the legalization of recreational cannabis. Cannabis Pro has analyzed the complexity of the subject before, but there is much left to investigate. Marcy Nicholson will be looking into this latest development today, watch for her analysis on Wednesday.