Wayland Group (CSE: WAYL) has continued its international expansion by purchasing 50.1% of Australian cannabis firm Tropicann Pty Ltd. in a deal that could rise to C$28.8 million ($21.9 million).
The Ontario-based producer will pay an initial C$4.8 million and then release an additional C$24 million if certain milestones are met. That includes Tropicann obtaining a license to cultivate cannabis in Australia’s Northern Territory, and there will be a floor issue price of $1.65 per common share.
It swiftly follows a similar deal that Wayland tied up with UK firm Theros Pharma Ltd. last week. It agreed to pay £3.8 million to buy 51% of the company and it will release an extra £24 million if Theros secures either a cannabis cultivation license or a license to import medical cannabis, taking the deal up to a potential $36.9 million.
The move to buy Darwin-based Tropicann marks its first foray into the Asia Pacific region. Darwin is located at the northern tip of Australia and it could make a useful base for Wayland’s Asian operations. South Korea and Thailand are racing to introduce medicinal cannabis markets and big Canadian firms like Wayland are keen to carve out a strong market share on the continent.
“Globalization of cannabis continues, and we are present in relevant markets, with Asia-Pacific now added to our international footprint,” said Wayland chief executive Ben Ward. “The Northern Territory is the ideal location for our new Asia Pacific hub.”
Ward believes the location will provide ideal climatic conditions for growing cannabis, while it is just four hours south of a “fast emerging region” with 250 million people.
Michael Gunner, the chief minister of the Northern Territory, welcomed the news, declaring that medicinal marijuana is a growth industry for the region and that it will create jobs going forward.
Australia legalized cannabis for medicinal purposes back in 2016 and its domestic industry is starting to gather pace. The Australian Capital Territory is pushing for the rollout of a regulated industry for recreational cannabis and cultivation is ramping up across the country, so it could emerge as an important market in its own right.