A publicly traded Canadian cannabis company announced Wednesday that it has acquired three California businesses, including a major distributor that generated over $25 million in revenue last year.
Ottawa, Ontario-based CannaRoyalty Corp. acquired:
- RVR, a large-scale distributor of both medical and recreational cannabis brands.
- Alta Supply, a smaller distributor of medical marijuana.
- Kaya Management, an edibles and vaporizer maker.
RVR is being acquired for 5 million common shares of CannaRoyalty, with an option for an additional 2 million shares dependent on RVR hitting particular “financial milestones.” The deal is expected to close by the end of the second quarter of 2018.
The acquisitions of Kaya and Alta cost CannaRoyalty 1.2 million in common shares and $2.165 million in cash, with an option for another 1.6 million in shares dependent on “achievement of certain milestones.” These two acquisitions must be approved by the California Secretary of State.
The acquisition of RVR is a coup for CannaRoyalty, since there currently are few operational distributors in California – despite a state requirement that all MJ products be shipped to market via licensed distributors.
RVR, based in West Sacramento, brought in $25.4 million in revenue in 2017.
CannaRoyalty CEO Marc Lustig called the deal a “major milestone on CannaRoyalty’s journey to building a global cannabis” company.
Oakland-based Alta Supply, which pulled in $6.5 million in revenue in 2017, will also bolster CannaRoyalty’s distribution capacity.
Kaya, also based in Oakland, is the exclusive manufacturer of Bhang edibles and vaporizer products in California.
Kaya generated $8 million in revenue in 2017.
CannaRoyalty’s acquisitions are another signal that large Canadian companies are moving quickly to garner as much marijuana market share as possible in California, where there are no residency requirement for ownership of cannabis businesses.