US-focused marijuana company agrees to purchase Canadian grower

A Toronto-based marijuana company focused on U.S. recreational and medical cannabis markets plans to spend about 23 million Canadian dollars ($18.3 million) in cash, stock and warrants to acquire a small licensed producer in Ontario.

MPX Bioceutical agreed to acquire Peterborough-based Canveda for CA$3 million in cash, CA$15 million in stock plus the issuance of 6 million common share purchase warrants, exercisable into one share for 84 Canadian cents each.

In the United States, MPX has business interests in dispensaries and cultivation facilities in four states: Arizona, Nevada, Maryland and Massachusetts.

The company’s latest move demonstrates how U.S. companies – or those primarily operating in the states – can leverage their branding experience or extraction technologies in the Canadian market, Echelon Wealth Partners analyst Russell Stanley told Marijuana Business Daily.

He pointed to the MedMen-Cronos joint venture announced last month as an example of a U.S.-based company coming north to expand its reach.

The move would give MPX a beachhead in Canada to market its branded products from the United States, Stanley wrote in a research note.

He said MPX-branded extract products developed by its U.S. operations could drive its Canadian expansion.

“This begins with oils, and should expand as other products are legalized here,” he wrote.

Canveda’s Peterborough facility is ready to commence its first production and is capable of producing up to 1,200 kilograms of cannabis flower annually.

MPX is traded on the Canadian Securities Exchange under the symbol MPX.

Matt Lamers can be reached at [email protected]

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