Merger talks between Aphria (APHA) and Aurora (ACB) fail
Earlier this week, BNN Bloomberg reported that Canadian cannabis producers Aphria (APHA) and Aurora (ACB) had considered a merger before the talks collapsed last week. BNN Bloomberg reported that the deal did not materialize due to disagreements on board composition and senior executive compensation. The details of the merger would have had Aphria shareholders control a little more than 50% of the combined entity, while Aurora shareholders would have held the remaining 49%. Aphria CEO Irwin Simon would have assumed control of the combined company. A successful merger could have created an entity with a dominant 30% share of the Canadian adult-use market, valuation of CA$3.5 billion, over CA$1 billion in revenues, and operations in 25 countries. There are likely other reasons why the merger did not happen, like little to zero syngeries.
APHA is a Hedgeye Cannabis Best Idea Short.
Innovative Industrial Properties Inc. (IIPR) partners with Curaleaf (CURLF) on NJ property
Cannabis REIT Innovative Industrial Properties Inc. (IIPR) recently closed on a property in Blue Anchor, NJ for $5.5 million. The property is approximately 111,000 square feet of industrial space and will be operated by a subsidiary of Curaleaf. Curaleaf intends for the property to operate as a regulated medical cannabis cultivation and processing facility. Curaleaf is expected to complete additional tenant improvements for the property, for which IIPR has agreed to provide reimbursement of up to $29.5 million. Assuming full reimbursement for the tenant improvements, IIPR’s total investment in the property will be $35.0 million. With this purchase, IIPR’s real estate portfolio expands to 4.5 million square feet in 16 states.
IIPR is on the Hedgeye Cannabis Long Bias List. IIPR is a non-plant touching way to play the growth in the cannabis space. IIPR partners with experienced medical-use cannabis operators and serves as a source of capital by acquiring and leasing back their real estate assets, in addition to offering other creative real estate-based capital solutions.
Cannabis helps British Columbia farm cash receipts hit record high in 2019
2019 farm cash receipts of British Columbia show that that the territory’s farm-sales hit CA$3.9 billion, driven by an increase of roughly CA$300 million in cannabis sales. Farm-sales grew ~13.4% from 2018, and cannabis sales outpaced the growth in other agricultural sectors/commodities.
