With the Cannabis Act officially taking effect this week, a flurry of business deals have been announced across the entire marijuana industry, from recreational to medical.
New Brunswick-based medical marijuana producer Organigram Holdings Inc. (TSXV: OGI) today announced the completed sale of Trauma Healing Centers (THC) to Harvest Medicine Inc.
THC is a clinic network that has been providing medical cannabis care to patients in Nova Scotia, New Brunswick, and Ontario since 2014.
Harvest Medicine, a medical cannabis clinic group located in Edmonton and Calgary, is a wholly-owned subsidiary of VIVO Cannabis Inc. (TSXV: VIVO).
The transaction will see Harvest Medicine acquire 100% of the issued and outstanding shares of THC from Organigram. The total purchase price for the shares will be $1,200,000, to be satisfied by the issuance of common shares in the capital of VIVO at a price per share equal to the ten trading day volume weighted average price immediately prior to the closing of the transaction.
Organigram CEO Greg Engel commented on the completed sale:
“Our top priority as a company is, and will continue to be, our commitment to our patient community. As our industry evolves, we have become increasingly confident in our strategy to focus on producing the highest quality cannabis at Organigram which has us reassessing our investments in clinic operations. As a function of this focus, we believe the patients and clients of Trauma Healing Centers will benefit from the experience and expertise of our partners at Harvest Medicine.”
Engel went on to say, “We are pleased to see two excellent organizations join forces to offer Canadian medical cannabis patients access to outstanding care. We are proud of our relationship with THC and look forward to seeing the outstanding team at Harvest take the delivery of care to the next level.”
Following the sale, a statement from Organigram indicated the company will continue to focus on supporting patients through the production of medical cannabis. Furthermore, the company is working to ensure availability of medical products by covering the cost of the $1/gram federal excise tax now implemented on all medical cannabis products due to the Cannabis Act.
“The excise tax will cause undue hardship and serve as an unnecessary barrier to access for medical cannabis patients,” says Engel. “We believe Canadians who have come to rely on medical cannabis should not be affected by changes brought on by Canada’s recreational cannabis program.”
While recreational use is now legal across Canada, medical usage is expected to continue to be a large focus of the industry, with pharmacy giant Shoppers Drug Mart (TSE: SC) recently receiving approval from Health Canada to also produce medical marijuana.