Canopy Growth to acquire craft marijuana retailer Hiku Brands for CA$269 million

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Ontario, Canada-based Canopy Growth has inked a deal to acquire Hiku Brands, a retail-focused craft cannabis producer.

Under terms of the deal, Hiku shareholders will receive 0.046 of a Canopy Growth share in exchange for each common share of Hiku. That’s equal to 1.91 Canadian dollars ($1.46) per Hiku share, or about CA$269 million.

The agreement requires approval of at least two-thirds of Hiku’s shareholders.

Here’s what you need to know:

  • Hiku was formed when two British Columbia-based cannabis firms agreed to merge: DOJA Cannabis and Tokyo Smoke. That deal positioned Hiku as one of the first Canadian craft cannabis producers with a national retail presence and a portfolio of premium marijuana lifestyle brands.
  • The Canopy/Hiku deal overrides a previous agreement Hiku entered in May to merge with Weed MD. That deal included a “right to match” trigger that Weed MD opted to waive. In order to cancel the deal, Hiku was on the hook to pay Weed MD $10 million – money Canopy advanced the firm to cover in the form of a promissory note.

Canopy Growth, a marijuana cultivator, trades on the New York Stock Exchange under ticker symbol CGC. The firm also trades on the Toronto Stock Exchange as WEED.