Tilray inked an agreement to merge with American private equity company Privateer Holdings, which previously owned roughly 77% of Tilray (75M shares). Privateer will become a wholly owned Tilray subsidiary.
CBC Business, Financial Post
- The goal of the merger was to control the release of Privateer’s 75M Tilray shares and give Tilray greater control over its public shares. The deal will lock up Tilray shares for two years, allowing for them to be sold only under certain conditions, at Tilray’s discretion. It will also mean Privateer eventually ceases to be an owner of Tilray over time.
- The merger resolves worries that Privateer might sell too much of its stock at once, and better positions Tilray for deals with pharmaceutical, alcohol, tobacco, and packaged goods firms.
- Privateer was founded by Tilray CEO Brendan Kennedy and is supported by venture capitalist Peter Thiel. Bloomberg declared Kennedy the second highest paid CEO in America last year, after only Elon Musk.
- Tilray won’t be in the black for a year or more because the company needs to invest heavily in CBD for the US market, which is how it plans to spend the second half of 2019.
- Tilray also signed a three-year deal with Quebec extraction company Neptune Wellness Solutions to process a minimum 125,000 kilograms cannabis biomass.
- The average online price of legal REC in five provinces has increased to $10.42 per gram even as supplies are becoming more stable.
Globe and Mail—Paywall
- An industry analyst forecasted a dried-cannabis oversupply by the end of the year. “By January, we are going to be swimming in dried cannabis biomass,” he said. The Leaf‘s Solomon Israel noted oversupply would drive down cost of legal REC, which would diminish the illicit market.
- Companies planning to expand cannabis operations into Latin America and the Caribbean can read up on the process in a new guide from Meritas Law Firms.