CB2 Insights (CSE:CBII), the medical cannabis-focused data firm, said Wednesday that it has struck a binding agreement to acquire MedEval Clinic LLC, a medical cannabis evaluation and education center group with locations in Colorado and Arizona, for about US$375,000 in cash and stock.
The deal marks the second clinical acquisition for the Toronto company and follows its takeover of Canna Care Docs, the biggest multi-state cannabis clinic group in the US, back in 2017.
MedEval runs two clinics in Colorado with locations in Colorado Springs and Centennial as well as one clinic in Phoenix, Arizona. Set up in 2014, it offers cannabis evaluation and educational services and reported about C$1 million in revenue last year.
Under the agreement's terms, the acquisition will cost CB2 US$150,000 in cash as well as 450,000 of its shares worth a deemed value of US$225,000. Additional milestone incentives are in place, which are valued at up to US$300,000.
In a statement, Prad Sekar, CEO of CB2 Insights, said the company is eager to expand in Colorado and Arizona.
“[T]his acquisition not only increases our data pool but has an accretive lift to our financial performance,” said Sekar in a statement. “Colorado plays a vital role in medical cannabis data, representing a very mature recreational market which also sees medical cannabis patient counts continue to grow. … Additionally, Arizona’s untapped market presents a number of opportunities for our company, as the state is primed for growth in the medical cannabis space.”
There is a lack of medical cannabis data, according to CB2 Insights, which is aiming to be a front-runner in filling demand. It proves predictive analytics tools as well as data-driven software and services. In addition, the company operates 28 cannabis evaluation and education clinics in 12 states.
When it comes to educating the medical community and having cannabis accepted as a form of medical treatment, clinical trials for cannabis are still years away. For now, much of the data has been anecdotal and, therefore, subjective, according to the company.
CB2 concentrates on gleaning real-world evidence obtained from data outside randomized trials and generated during routine clinical practice. The company has created what it says are game-changing tools that engage the medical community and provide the data doctors and other professionals need to recommend with confidence cannabis-based medicines.
CB2 Insights currently evaluates 65,000 patients annually through its clinic network and handles millions of clinically validated data points to advance understanding of the effectiveness and risks associated with cannabinoid therapy.
CB2 shares slipped C$0.015 to hit C$0.305 in afternoon trade on Wednesday.
Contact Ellen Kelleher at [email protected]
-- This story was updated to include the price of CB2's MedEval acquisition as well as the latest share price movement--