Investor Ideas #Potcasts 531, #Cannabis News and #Stocks on the Move; (CSE: $IPOT.C) (TSX: $HEXO.TO) (NYSE: $HEXO) (TSXV: $NDVA.V) (TSX: $FAF.TO)
Delta, Kelowna, BC, February 16, 2020 (Investorideas.com Newswire) www.Investorideas.com, a global news source covering leading sectors including marijuana and hemp stocks and its potcast site, www.potcasts.ca release today’s podcast edition of cannabis news and stocks to watch plus insight from thought leaders and experts.
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Today’s podcast overview/transcript:
Good afternoon and welcome to another episode of Investorideas.com "Potcast" featuring cannabis news, stocks to watch as well as insights from thought leaders and experts.
In today’s podcast we will be looking at a few public and private company announcements.
Isracann Biosciences Inc. (CSE: IPOT) (OTC: ISCNF), an Israel-based company focused on becoming a premier low cost, high quality cannabis producer announced that its flagship Hefer Valley-based Ein Hahoresh Farm is in full readiness to commence growing and production activities.
With the phase one 54,000 sq. ft. of greenhouse canopy fully constructed and extensive processing capability in-place, Isracann is moving rapidly towards the commencement of industrial-scale operations aimed at servicing both domestic and European export markets in 2021.
The Ein Hahoresh farm operations and construction teams recently expanded the onsite post-harvest facility in preparation to meet increased demand from regional partners representing both domestic and export market sales opportunities. Subject to final Security and Ministry of Health approvals for the requisite farm operating license, the Company is preparing the property for imminent production activities.
Currently, Isracann and its local consultants have scheduled the commencement of planting for early March to coincide with the start of optimal climatic conditions, subject to the timely receipt of final government approvals.
Isracann COO Matt Chatterton comments, “We are pleased to report that we have concluded every step as outlined by our regional consultants who have brought proven and invaluable experience in working with the Israeli government. Additionally, it should be noted that the various representatives of the ministries involved have been professional, open, and forthright in their dealings with us at all times. Everyone has been working within the context of the global pandemic and we are grateful to all concerned to have achieved so much during what have been extremely trying times. We look forward to reporting on the conclusion of the upcoming inspections and confidently anticipate an exciting period of activity ahead as we continue to build, grow and create value in Israel.”
HEXO Corp. (TSX: HEXO) (NYSE: HEXO) and Zenabis Global Inc. (TSX: ZENA) announced that they have entered into a definitive arrangement agreement (the "Arrangement Agreement") under which HEXO will acquire, by way of court-approved plan of arrangement under the Business Corporations Act (British Columbia), all of Zenabis’ issued and outstanding common shares in an all-share transaction valued at approximately $235 million. Under the terms of the Arrangement Agreement, Zenabis shareholders will receive 0.01772 of a HEXO common share in exchange for each Zenabis common share held (the “Exchange Ratio”). The Exchange Ratio implies a premium per Zenabis common share of approximately 19% based on the 20-day volume-weighted average price ("VWAP") of Zenabis common shares on TSX and HEXO common shares on TSX as of February 12, 2021. Warrants and incentive securities of Zenabis will be adjusted in accordance with their terms to ultimately become exercisable to receive common shares of HEXO based on the share exchange ratio.
The Transaction was unanimously approved by the board of directors of each of HEXO and Zenabis (in the case of Zenabis’ board of directors, after receiving the unanimous recommendation of a special committee formed for purposes of the Transaction), and Zenabis’ board of directors unanimously recommends that its shareholders vote in favour of the Transaction.
Transaction Highlights
● Strengthened domestic brands: Based on HEXO’s and Zenabis’ most recent interim quarterly financial statements and results, and those of the other top licensed producers in Canada, the combined organization would be a top three licensed producer in terms of combined Canadian recreational cannabis sales.
● Foothold in Europe: The Transaction gives HEXO immediate access to the European medical cannabis market through Zenabis’ local partner, with an established facility in the European Union supplying pharmaceutical products to the European market. The facility also serves as a European Union Good Manufacturing Practice packaging and distribution centre for medical cannabis products produced in Zenabis' Atholville Facility.
● Accretive synergies: HEXO estimates that the combined entity may realize annual synergies of approximately $20 million within one year of close, through cost of goods reductions, additional capacity utilization in HEXO’s Belleville Centre of Excellence and selling, general and administrative savings, which, if realized, should allow HEXO to continue its path towards positive earnings.
● Capacity boost with state-of-the-art cultivation infrastructure: The proposed Transaction would give HEXO access to licensed capacity to produce approximately 111,200 kg of additional high-quality cannabis annually. The Transaction would result in HEXO acquiring two indoor facilities (approximately 635,000 sq. ft.) and access to a 2.1 million sq. ft. greenhouse facility, totalling approximately 2.735 million sq. ft. of near-term cultivation space offering diversified growing and production techniques. This provides a platform for growth and foundation from which to strengthen and diversify our portfolio of brands.
“We're thrilled to welcome the Zenabis team into the HEXO family. Zenabis has built solid relationships and they share HEXO’s vision of bringing exceptional branded cannabis experiences to adults everywhere, in Canada and abroad” said Sebastien St-Louis, CEO and co-founder of HEXO Corp. “We are proceeding with this transaction because we believe it should be accretive for our shareholders, and it also positions HEXO for accelerated domestic and international growth while supporting near-term requirements for additional licensed capacity. HEXO’s growth strategy includes expanding our global presence, and this acquisition is an important step in that direction.”
“This is a compelling combination. Our brands and strains strength across Canada, coupled with our international footprint and state of the art low cost and high quality cultivation facilities complements HEXO’s business, creating an industry leader. Like HEXO, Zenabis believes that the combination should deliver meaningful synergies, a stronger financial position with increased flexibility, and should position the combined company to meet growing consumer demand on a national and international basis. I believe this transaction is beneficial to our shareholders, customers, partners, and employees. We look forward to working closely with HEXO to complete this transaction," added Shai Altman, CEO of Zenabis.
Sundial Growers Inc. (NASDAQ: SNDL), a Canadian licensed producer of recreational cannabis and Indiva Limited (TSXV: NDVA) (OTCQX: NDVAF), a leading Canadian producer of cannabis edibles, announced a $22,000,000 strategic investment into Indiva by Sundial.
The Investment will be completed in the form of a brokered private placement led by ATB Capital Markets Inc. of 25,000,000 common shares of Indiva at a price of $0.44 per Common Share, to raise gross proceeds of $11,000,000, and a non-revolving term loan facility to Indiva in the principal amount of $11,000,000. It is anticipated that Sundial will be the sole subscriber in the Placement. Proceeds to Indiva, net of fees, commissions and expenses are expected to be approximately $20.9 million.
"Sundial is pleased to support the development of Indiva's high-quality products," said Zach George, Chief Executive Officer of Sundial. "This transaction broadens our exposure to the rapidly expanding cannabis edibles category."
Indiva intends to use the net proceeds of the Placement and Term Loan to retire its outstanding debt in full, which includes its demand loan and promissory note, as well as for working capital and other general corporate purposes.
"We are delighted to welcome Sundial as a strategic investor in Indiva," said Niel Marotta, President and Chief Executive Officer of Indiva. "The capital from this $22 million investment significantly improves Indiva's balance sheet, expands our working capital, and provides the resources necessary to support strong growth in our business. Indiva will now have the ability to make additional capital investments, primarily into automation, which will drive higher throughput and profitability, while ensuring our product quality maintains the best-in-class standard our customers and clients depend upon. Indiva's bolstered financial strength will ensure we can defend our market share position as a top edibles producer in Canada, and continue to bring new and innovative cannabis products to of-age Canadians."
Sundial and Indiva intend to complete the Investment on or about February 23, 2021, subject to certain conditions customary for transactions of this nature, including, but not limited to, the receipt of all necessary approvals, including the approval of the TSX Venture Exchange.
The securities issued under the Placement will be subject to a statutory hold period of four months and one day following the closing of the Placement.
Indiva has agreed to: (a) pay to ATB a cash commission equal to 3.0% of the aggregate gross proceeds received by Indiva from the Placement from Sundial and 6.0% of the aggregate gross proceeds received by Indiva from the Placement from subscribers other than Sundial, if applicable; and (b) pay to the Agent a cash commission equal to 2.0% of the total loan commitment under the Term Loan.
Fire & Flower Holdings Corp. (TSX: FAF) (OTCQX: FFLWF), a leading cannabis retailer with a proprietary e-commerce and digital retail platform, today announced that it has submitted an initial application to list its common shares on the Nasdaq Stock Market.
The anticipated Nasdaq listing is part of Fire & Flower's growth strategy which is focused on expanding its brand to markets outside of Canada. The Company anticipates that the Nasdaq listing will assist in attracting retail and institutional investors interested in Fire & Flower's international growth ambitions as well as provide the Company with increased access to strategic partners, deal-flow and value creation opportunities.
Trevor Fencott, Chief Executive Officer of Fire & Flower, commented, "We are firmly committed to building Fire & Flower into one of the leading cannabis retailers in the world. Our ability to deliver a superior cannabis product and customer experience, along with our cutting-edge technology, has driven our success in Canada and strongly positions our Company for continued expansion in new high-growth markets."
Fencott continued, "Our focus on building a leadership position within the cannabis industry goes hand in hand with driving increased value for our shareholders. This application to list on Nasdaq is a major step forward in expanding our shareholder base in the United States. We will continue to pursue domestic and international opportunities for accelerated growth in the years ahead and look forward to updating our broadening shareholder base as we move ahead."
Fire & Flower will continue to be listed on the Toronto Stock Exchange under the symbol "FAF". The listing of the Company's common shares on Nasdaq remains subject to the review and approval of the Company's listing application and the satisfaction of all applicable listing and regulatory requirements. The Company has retained Dentons as legal counsel in connection with the application to list on Nasdaq.
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