International Cannabis Corp. (CSE: WRLD.U; OTCMKTS: KNHBF) has purchased 49.9% of Wayland Group’s international assets in a deal worth $129 million.
ICC will issue 300 million shares to Wayland at a deemed price of $0.43 per share and the deal is expected to close on March 1, subject to regulatory approvals. It will significantly increase the firm’s footprint in Europe, South America, and Australia.
Wayland Group (CSE: WAYL) (FRANKFURT: 75M; OTCQB: MRRCF) was founded in 2013 and it has headquarters in Ontario and Munich. Its international business comprises operations in Germany, Italy, and Colombia, while it also has supply agreements in place in the UK, Australia, and Argentina. The deal values Wayland at $258 million.
When the transaction is completed, Wayland will distribute the shares to its shareholders after a six-month holding period. It said the transaction will allow it to unlock the value of its international assets, while benefiting from ICC’s international framework.
It is poised to sign a three-year supply deal with ICC to sell it 10,000 kilos of EU GMP-certified cannabis per year. ICC will also work with Wayland’s German advisory board to bolster its knowledge of that key market.
The two firms will launch an international subsidiary, jointly owned by both companies. ICC chief executive Eugene Beukmann called it a “watershed acquisition” for his firm. “This acquisition will solidify ICC as a global Cannabis leader, with exposure to a broader range of countries than any competitor to date,” he added.
Germany has a large and wealthy population, and it totally relies on imports to meet demand for medicinal marijuana, so it is a major prize for global cannabis firms. Beukmann sees Germany and Asia Pacific as two high-growth marketplaces that it aims to ramp up its operations in, and this deal should facilitate those goals.
Once the deal goes through, ICC will have a stake in a German cannabis import license, a medicinal cannabis cultivation license and an 820,000 sq. ft. facility, plus a three-year agreement to distribute marijuana to 2,200 pharmacies.
In Switzerland, it will gain an interest in a 60,000 sq. ft. facility, a genetics portfolio ready for export and a THC distillate import business. It will be in the mix for one of seven licenses to be issued by the Italian government and it will gain a Maltese license.
It is also now a leading candidate for a UK-based medical cannabis import license and gains access to an Australia late-stage medical Cannabis license application. The duo also hopes to land an Argentinian Federal Medical Cannabis license with approval expected in early 2019.
Between the pair of them, ICC and Wayland will jointly hold supply agreements with 39,000 corporate and independent pharmacies and have 16 licenses spread across 12 countries and four continents.
“The transaction provides an opportunity at the appropriate time to fully integrate our international operations with ICC’s to cover all aspects of the value chain, including medical plant production, extraction, active pharmaceutical ingredient isolation, finished dose manufacturing, and distribution,” said Wayland chief executive Ben Ward.