A prominent U.S. cannabis company has acquired a “major” equity stake in a fledgling producer of medical marijuana in Ontario, and the CEO of Colorado-based MJardin told Marijuana Business Daily “there will be more to follow.”
The investment is the latest sign of growing interest among U.S. marijuana companies in the Canadian MJ market ahead of that country’s planned legalization of adult-use cannabis next year.
MJardin declined to disclose the financial terms or the amount of the stake it purchased in Dunnville, Ontario-based Grand River Organics.
The Colorado company manages dozens of cultivation facilities for different MJ companies. It also provides consulting services in cannabis cultivation and processing.
The transaction is the second in two months in which a notable U.S. marijuana company has taken a stake in a fledgling Canadian MMJ cultivator.
Last month, Denver-based LivWell Enlightened Health purchased a significant stake in Lethbridge, Alberta-based 51st Parallel.
Ian Dawkins, principal consultant of the British Columbia-based Althing Consulting, sees it as the start of a trend.
“The reason is pretty straightforward,” he said. “A Canadian LP is a unique thing globally speaking, in that they are legal at a federal level, which lets investors delve into cannabis without the banking issues that tie up companies stateside.
“There’s a lot of interest in finding one of these mythical LP applicants that is not already investor-owned.”
The stake in Grand River Organics is MJardin’s first foray into Canada as an owner-operator.
Grand River Organics is one of 460 applications awaiting approval from Health Canada.
MJardin CEO Rishi Gautam said Canada is one of his company’s top strategic priorities, and that MJardin aims to have a”significant presence” in a number of facilities across the country.
“We’ve had our eyes wide open for opportunities,” he said. “There will be more to follow.”
The company will serve as an equity partner in Grand River Organics, providing turnkey cultivation, processing and project management, as well as training, according to a news release.
Grand River’s 40,000-square-foot facility in southwestern Ontario is under construction.
The companies will collaborate to produce and distribute medical cannabis throughout Canada, while positioning themselves for the legalization of recreational cannabis.
Matt Lamers can be reached at [email protected]
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