Tidal Royalty Corp (CSE:RLTY) (OTCMKTS:TDRYF) said Friday its business-combination agreement with MichiCann Medical Inc is “steadily and strategically moving forward.”
The transaction with MichiCann is staying true to the original overall strategy, which is to achieve critical mass within the company's target markets while rapidly and aggressively expanding in the US cannabis and CBD business, Tidal Royalty said in a statement.
“We want to assure our shareholders that we are continuing to closely monitor public market conditions, drawing on our own experience in capital market strategy and seeking the advice of many seasoned capital markets veterans to identify the appropriate time to close the MichiCann amalgamation transaction,” the company said.
READ: Tidal Royalty announces MichiCann Medical inks deal to acquire the world’s largest indoor premium hemp facility in Illinois
Under the combination agreement, all of the issued and outstanding common shares of MichiCann will be exchanged on the basis of 2.08 common shares of Tidal for each one MichiCann common share, subject to adjustment as set out in the definitive agreement.
After the transaction is completed, existing MichiCann and Tidal shareholders will own approximately 80% and 20% of the resulting company, respectively, on a fully diluted basis.
MichiCann is a private cannabis investment company based in Vaughan, Ontario. Anchored by its Illinois facility, MichiCann intends to establish large-scale production capabilities focused on hemp extraction and product manufacturing in the US.
MichiCann operational highlights
Meanwhile, Tidal Royalty provided operational and production updates from MichiCann:
- MichiCann's investee in Michigan now possesses 17 dispensary (provisioning center) licenses, and is strategically moving toward its goal of 25 licenses by year-end.
- Investee has obtained over 20 Class C grow licenses (each covering 1500 plants).
- Adding this month (through acquisition), investee's near-term cultivation capacity will include a fully operational 28,000 square foot indoor cannabis grow operation.
- Investee will extend Michigan's outdoor growing season with new self-contained year-round pods, providing additional immediate growing space without significant new construction costs and timelines.
- MichiCann continues to negotiate definitive agreements for a California acquisition, additional details will be provided as negotiations progress.
- It has signed a term sheet for USD$50 million (approximately CAD$66 million) in debt financing. Proceeds from this will be used to replace the previously reported USD$27 million bridge loan, provide additional capital to complete the previously announced Illinois facility purchase, and for additional expansion capital.
- MichiCann has successfully launched its 1Kure brand in 10 of its operating stores in Michigan, and its marketing team has been busy behind the scenes developing a fulsome modern brand strategy that includes Red White & Bloom branded CBD products that will elevate current verticals in fitness, beverages, wellness, pain management, men's grooming and pet care.
- Brad Rogers, the CEO of MichiCann, has been invited to be a keynote speaker at the invite-only BrandWeek CMO conference in Palm Springs from November 3rd - 6th. He will be speaking about purpose-driven CBD and representing the only company in the cannabis space among other top brands in the US that include, Johnson & Johnson, Heineken, Sephora and Target.
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