Local cannabis company DOJA has announced its involvement in a massive merger today with Canada’s largest licensed producer Canopy Growth Corp.
Hiku Brands Ltd., a product of the merger between Kelowna's DOJA Cannabis Company and Toronto's Tokyo Smoke, will be acquired by Canopy Growth Corp for around $250 million in an all-stock deal.
Under the agreement, Hiku shareholders will receive 0.046 of a Canopy Growth share for every common share they hold in the company, equivalent to $1.91 per Hiku share.
— Canopy Growth (@CanopyGrowth) July 10, 2018
Canopy’s acquisition of Hiku will expand the cannabis grower’s retail footprint across Canada.
Hiku has been making aggressive moves in provinces where private cannabis retail stores will be allowed. According to a company update from late June, Hiku has filed applications for 12 storefronts in Calgary and has entered Edmonton’s lottery system for awarding retail licenses.
In Manitoba, Hiku holds one of only four conditional retail licenses from the province, which gives it the ability to open between nine and 16 stores.
However, the deal also nullifies a previous $240 million merger between Hiku and licensed producer WeedMD Inc. that was agreed upon back in April.
According to a press release, Hiku has paid WeedMD a $10 million termination fee in order to accept Canopy’s “superior proposal.”
"Hiku equals brands. Canopy is built on brands. So we combined them," said Bruce Linton, Canopy’s CEO.
Hiku’s CEO Alan Gertner said the partnership “Both realizes immediate benefits for our shareholders and at the same time provides an unparalleled opportunity to join forces with a preeminent global cannabis player.”