Toronto-based cannabis producer The Flowr Corp. entered into a definitive agreement to acquire Terrace Global, a Canadian company focused on the development of international marijuana assets.
Flowr CEO Vinay Tolia said the deal will “deepen our existing relationship and partnership with Terrace Global into a full combination of the two companies.
“Together, we believe that we have a more robust financial profile, which will give us sufficient access to liquidity to pursue our strategic objectives in Canada and internationally.”
Flowr and Terrace had previously entered into a partnership in May to develop Flowr’s outdoor operation in Portugal.
The combined companies will have CA$31 million in cash and marketable securities, according to the release.
The proposed deal comes amid a lukewarm market for mergers and acquisitions in the cannabis industry.
According to New York-based Viridian Capital Advisors, M&A transactions completed year-to-date are down 77% compared to last year.
However, in a recent note, Viridian “expects increased activity in the remainder of the year.”
Roughly 92% of M&As that closed this year have been by public companies, up from 71% in 2019, according to Viridian.
Terrace operates in four countries, with its head office in Canada.
The company reported a net loss by geographical segment of:
- CA$1.26 million in Canada.
- CA$162,340 in Uruguay.
- CA$348,864 in Portugal.
- CA$50,626 in Spain.
For the six months ended June 30, Terrace reported a net loss of CA$1.8 million.