The Bis Weekly News Update – February 3 to 8

It’s dark, cold and wet all across the country right now; the perfect time to curl up with a joint and some hot-off-the-presses cannabis news. 

It has been a tumultuous time for corporate cannabis in Canada this week. While Toronto would receive good news about their first potential brick and mortar storefront, Health Canada has reportedly suspended Bonify’s license, Aphria has returned a swift no to Green Growth Brand’s uninvited bid and more. We’ve got a rundown here at The Bis’ weekly news round up. 

Toronto’s first legal cannabis retail location could be in Yorkville

According to a posting on the Alcohol and Gaming Commission of Ontario’s website, an application has been submitted to open up a dispensary in the iconic Yorkville area. The address 20 Cumberland St, a short walk from the Royal Ontario Museum, will likely soon become the city’s first cannabis store, “AMERI.”

This will be one of five cannabis stores in the Toronto municipality, after the Ford government chose to license an initial 25 storefronts in the province in order to avoid the shortages that have plagued other regions, including Alberta and Quebec.

It was also revealed today that applications have been submitted for the Ganjika House at 186 Main St S, in Brampton, and The Niagara Herbalist, at 33 Lakeshore Rd in St. Catherines, Ontario. These locations, including the one in Toronto, mark the first three named sites for legal cannabis retail in the province — outside of First Nations reservations.

Health Canada suspends Bonify’s cannabis license

Health Canada has suspended the sales licence of Winnipeg-based cannabis producer Bonify.

The federal agency barred Bonify Medical Cannabis from selling cannabis on Monday due to safety and public health concerns.

“The department found that Bonify Medical Cannabis was possessing, distributing and selling product that was purchased from an illegal source, and selling product that did not comply with the good production practices as required under the Cannabis Act and cannabis regulations,” Health Canada spokesperson Eric Morrissette said in a statement.

The case has been forwarded on to the RCMP and Canada Revenue Agency, said Morrissette.

The announcement comes after Health Canada issued a recall on two Bonify strains in December over contamination concerns on products sold in Saskatchewan.

Aphria says no to a hostile bid by Green Growth Brands

Lemington, Ontario’s Aphria Inc., a licensed producer of medical cannabis, has officially rejected an uninvited offer made against their company by Green Growth Brands last month.

In a statement released Wednesday morning, Aphria says the offer significantly undervalues the company based on what it views as the company’s current and future worth. This contrasts from the “premium observed in other transactions in the cannabis sector involving Canadian licensed producers.”

The offer by GGB was $9.41 per Aphria Share. A “24.5% premium over the Aphria Shares’ closing price of $7.56 on the Toronto Stock Exchange on December 24, 2018, the last trading day prior to GGB’s public announcement.” The lack of adjustment is a key sticking point for the value of the deal, according to Aphria, as the offer constituted a 23% discount to their trading price this morning.

“The Aphria Board of Directors unanimously believes that GGB’s hostile offer is significantly undervalued and inadequate and not in the interest of Aphria shareholders on multiple grounds,” said Irwin D. Simon, Aphria’s independent board chair, in the statement. “Regardless of their brazen attempts to suggest otherwise, GGB is asking Aphria shareholders to accept a substantial discount on their shares, as well as delisting from both the TSX and NYSE, resulting in a vast dilution of their ownership in Aphria.”

Cannabis company Namaste Technologies axes CEO, stock falls 21%

In response to accusations made in a short sellers report last fall, Canadian cannabis company Namaste Technologies, announced Monday they have fired their CEO, initiated a strategic review of the company, and aren’t ruling out selling. 

The immediate result has been a sudden and sharp drop in their stock price.

The company’s director and CEO, Sean Dollinger, has been removed from his position after an investigation into a September 2018 report released by short sellers Citron Research, who levelled a series of serious accusations at the company, and Dollinger in particular.

“Following an investigation by a Special Committee of the Board of Directors, the board has terminated the employment of Sean Dollinger as Chief Executive Officer of the company for cause and removed him from his position as director, effective immediately,” said a statement from Nameste.

Meni Morim has been appointed Interim CEO of the company. Before taking the position, Morim was Namaste’s Chief Product Officer and Director of Artificial Intelligence since May 2018.

News of Dollinger’s dismissal drove the company’s stock down from $1.38 on Friday to $1.15 on Monday morning, as the company also announced that they have begun a formal strategic review to consider their alternatives, which could include “exploring a potential corporate transaction that may, but not necessarily, result in the sale of the company.”

The Citron report didn’t pull punches, calling Nameste a “$1 billion company that does not grow cannabis, rather they sell vape pens and  have a website that did a paltry $46k in revenue last quarter as they lost $9 million.”

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