Westleaf Cannabis and Calgary-based IGC Resources Inc. (TSXV: IGC.H) announced a private placement deal with Tilray (NASDAQ: TLRY) to raise funds for expanding operations across Canada.
The investment deal arrives in conjunction with Westleaf receiving conditional approval from the TSXV for a reverse takeover of IGC, which is expected to be completed later this month.
Tilray’s private placement will net IGC just over $20 million from 23 million subscription receipts. Each of those receipts will become one common share of IGC when the escrow release conditions of the reverse takeover are met.
Additionally, Tilray is investing a further $2.9 million into Westleaf through the same offering. Trading of common IGC shares are now halted until the deal is formally completed.
Westleaf’s Chief Executive Officer Scott Hurd stated the multi-million investment from Tilray showed a “validation of our innovative approach to retail through our retail banner, Prairie Records, and is a strong endorsement of Westleaf’s strategy and leadership team.”
Hurd went on to issue these comments to investors:
“As a global leader in the cannabis industry, we believe Tilray’s investment in Westleaf reinforces the strength of our approach to cannabis retail and our team’s execution capabilities and is a testament to Tilray’s confidence in our ability to capture market share. We are excited about the partnership with Tilray and look forward to continued growth together.”
The funds raised from the private placement will be utilized for the expansion of a proposed 20 Prairie Records stores that combine music and cannabis consumption in Saskatchewan, British Columbia, and Alberta. Westleaf has also landed pre-qualification in Manitoba for a cannabis license.
The first Prairie Records store is due to open early next year at the Palace Theatre in Calgary, while the remaining stores on the docket are still pending provincial approval and lease agreements for storefront space.
This is the latest in a string of private placement investments from Tilray, with the cannabis corporation also investing more than $1 million into IntelGenX Technologies (TSXV: IGX) earlier this month.