Canadian, British cannabis companies Aqualitas and Cannaray to merge

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Medical cannabis companies from Canada and Britain are joining forces to create a global, vertically integrated business to tap opportunities in Europe and beyond.

Nova Scotia medical cannabis cultivator and processor Aqualitas has signed a definitive agreement to merge with Cannaray Limited, a European medical marijuana company headquartered in London.

The merged company will be based in London and led by Cannaray CEO M. Scott Maguire, a spokesperson told MJBizDaily via email.

The name of the combined company will be announced shortly.

In 2023, the combined revenue of Aqualitas and Cannaray amounted to approximately $51 million (69 million Canadian dollars), according to the news release announcing the merger.

In a phone interview with MJBizDaily, Aqualitas CEO and founder Myrna Gillis said the merger won’t result in layoffs, and the company is hoping to continue growing in Canada.

“It’s very complementary what the two companies bring together,” said Gillis, who is planning to stay on the board of the combined entity.

The merger comes amid industry consolidation that usually results in job losses.

She said it’s important for people to understand that this is an integration story that’s based out of Europe, “because having that presence is a real differentiating point.”

Stable, predictable sales growth has proved to be a challenge for many medical cannabis exporters.

Whether they’re from Australia, Canada or Colombia, exporters sometimes see large swings in global shipments quarter-over-quarter stemming, in part, from the highly competitive nature of the industry.

“That’s what’s nice about this,” Gillis said. “We have more stability in the predictability of our own supply chain, but we also have diversity (of customers) and integration for other activities as well.”

To that end, Cannaray has two medical cannabis divisions – Therismos GmbH in Germany and Therismos Limited in the United Kingdom.

The companies said the merger sets them up to capture growth amid a pivotal moment in the European medical cannabis sector, as countries such as Germany are set for potentially substantial growth in the years to come.

“We are positioned to play a leading role in Germany, where the German market is expected to grow exponentially as a result of the impending declassification of cannabis from a narcotic to a non-narcotic,” Maguire said in a statement.

“We will be one of the few European companies with a seed-to-shelf operation in the UK and Germany.”

In Germany, Therismos has a partnership with Walgreens Boots Alliance’s German subsidiary, Alliance Healthcare/GEHE, which has 4,000 partner pharmacies, the companies said in the announcement.

In the U.K., Therismos has a medical cannabis dispensing pharmacy and clinic.

“It’s good to have a combination of different customers in your portfolio with different bite sizes,” Gillis said.

“It’s also important to have redundancies in your supply chain. If you have those two things together, you can withstand any disruption that’s ultimately and likely to happen. We’ve seen it.”

Aqualitas is a privately owned, vertically integrated, Health Canada license holder distributed in all Canadian provinces and overseas.

“Aqualitas is my baby,” Gillis said, “and I’ll always have my heart with her as a founder. I’ll continue to support the organization.

“You need to be purposeful and strategic about these things. We had a plan from Day One – this international integration was always part of that plan early on.

“You keep focused, and the right things happen.”

Matt Lamers can be reached at matt.lamers@mjbizdaily.com.