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Tidal Royalty to buy Altmed from CannaRoyalty Corp in a C$8mln cash and royalty deal

Published: 09:58 27 Aug 2018 EDT

A woman holding a marijuana leaf
Tidal Royalty provides cannabis companies in the US with financing in exchange for a share of future revenues

Tidal Royalty Corp (CSE:RLTY, OTC:TDRYF) announced Monday that it had secured a letter of intent (LOI) from CannaRoyalty Corp (CSE:CRZ, OTCMKTS:CNNRF) to buy Alternative Medical Enterprises LLC for C$8mln in a combined cash and stock deal.

Tidal Royalty provides cannabis companies in the US with financing in exchange for a share of future revenues. It has also entered into LOIs in California, Nevada and Massachusetts and is evaluating further opportunities in Florida, New York, Arizona, Ohio and Michigan.

Saratosa-based medical cannabis company AltMed runs cannabis dispensaries in Florida and Arizona. It also has an application pending for the state of Ohio. AltMed focuses on bringing pharmaceutical industry precision to the development, production and dispensing of medical cannabinoids.

READ: Tidal Royalty enters into letter of intent to finance Illinois cannabis operator's expansion

Shares of Tidal Royalty were down 2.93% to US$0.46 in the US OTC market, while they fell 5.15% to US$0.46 on the Canadian Securities Exchange. Meanwhile, CannaRoyalty stock shot up 8.48% to US$4.25 in the OTC market, while it ran up over 11% to US$5.61 on the CSE.

With the deal, Tidal Royal will acquire CannaRoyalty’s 6.14% ownership stake in AltMed and a 3.5% royalty on global net sales of AltMed’s branded MüV™ line of transdermal patches, metered dose inhalers, and patent-pending transdermal gels.

"We've been following AltMed for quite some time now and have watched them expand their footprint very strategically and methodically. They are led by an extremely entrepreneurial and capable management team and we feel that they are positioned to be a leading player in the US industry. We are excited to be in this position and look forward to finding additional ways that we can support their growth plans," said Tidal Royalty CEO Paul Rosen.

"This transaction was made possible by our strong synergistic relationship with CannaRoyalty, a company whom we have a great deal of respect and admiration for. We are confident that our companies will identify additional mutually-strategic opportunities in the emerging US regulated cannabis industry," he added.

Tidal Royalty said the deal would close after a “satisfactory completion of due diligence,” and corporate and regulatory approvals.

READ: CannaRoyalty posts strong 2Q earnings and revenue in focusing on California's cannabis market

"The sale of our equity stake and royalty in AltMed advances our stated strategy of realizing value for shareholders on assets that are deemed non-core to our business,” said CannaRoyalty CEO Marc Lustig.

“The substantial gains from our successful investment in AltMed will provide CannaRoyalty with capital to continue to expand its distribution and brand network in the California market, while offering CannaRoyalty shareholders a significant return on investment," said Lustig. "We were early to identify the long-term potential in AltMed and MuV as vital players in the North American cannabis value chain and are confident that the businesses will be valuable additions to Tidal Royalty's diverse portfolio. As CannaRoyalty continues to grow and build a solid presence in California, we look forward to partnering with the experienced team at Tidal Royalty."  

CannaRoyalty is based in Ottawa, Canada. It is a North American cannabis consumer product company focused on building a distribution business in California, the world's largest regulated cannabis market.

Contact Uttara Choudhury at uttara@proactiveinvestors.com

Follow her on Twitter@UttaraProactive 

 

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