Two British Columbia-based marijuana companies agreed to a merger, creating what they’re billing as Canada’s first retail-focused, craft cannabis producer.
DOJA Cannabis, traded on the Canadian Securities Exchange, and Tokyo Smoke are joining forces to form Hiku Brands Company Ltd.
Under the terms of the deal, DOJA will purchase all of the issued and outstanding shares of Tokyo Smoke. The price tag was not disclosed.
Aphria, one of Canada’s largest medical marijuana producers, is making a 10 million Canadian dollar ($7.8 million) strategic equity investment in Hiku.
With the investment from Ontario-based Aphria, traded on the Toronto Stock Exchange as APH, Hiku will have CA$31 million in cash, which it plans to invest in expanding production capacity and national retail footprint.
Tokyo Smoke, owner of the Van der Pop brand, already has six locations in Canada, and Hiku says it will prioritize retail expansion in provinces allowing privately-owned cannabis stores.
DOJA is a licensed producer of craft medical marijuana with a 7,100-square-foot production facility. When its second facility comes online in mid-2018, a 22,580 square-foot warehouse, Hiku’s annual production capacity will be about 5,000 kilograms per year.
Under the deal, DOJA Cannabis will operate as a wholly owned subsidiary of Hiku.