Celebrities cash in on cannabis
One of Colorado’s largest recreational pot companies is planning to bring Willie Nelson’s marijuana brand to Canada and go public in Toronto.
LivWell Enlightened Health LLC is planning a series of deals that include taking over management of a Calgary-based cannabis firm and a reverse takeover of investment company Target Capital Inc., the companies said Monday.
It is also changing its name to LivWell International and striking a side deal that will give it perpetual distribution rights in Canada to Willie’s Reserve, the U.S. country singer’s namesake marijuana brand, they said. The transactions were first reported by Bloomberg News.
LivWell is expected to have an enterprise value of about C$300 million ($228 million) after going public, according to people familiar with the deal. The Denver-based company has about 500 employees and generates about US$80 million in annual sales from marijuana growing, processing and retailing, according to its website.
The deals will bring one of the best-known American marijuana brands to Canada, while continuing a trend of U.S. pot companies heading to Toronto to tap investor demand for weed stocks. With U.S. law curbing its ability to expand globally, listing in Canada will give LivWell access to international markets.
The company already had a toehold in Canada through a stake in Calgary-based 51st Parallel. LivWell is taking over management of 51st, which is raising $50 million, completing the takeover of Target Capital, and buying a US$20 million stake in GCH Inc., the owner of Nelson’s weed brands.
The GCH deal will give LivWell 12 per cent of that company and a seat on its board, along with a first crack at Canadian rights to other brands GCH develops.
Cannex Capital Holdings Inc., owner of the largest marijuana company in the U.S., listed its shares in Toronto in March. Chief Operating Officer Leo Gontmakher said at the time that it’s “virtually impossible” to raise money in the U.S., where cannabis remains illegal at the federal level. Other publicly traded Canadian firms with U.S. operations include Ottawa-based CannaRoyalty Corp. and Liberty Health Sciences Inc. of Toronto.
Recreational marijuana is set to become legal in Canada on Oct. 17, opening a market that Bloomberg Intelligence analyst Kenneth Shea has estimated may exceed $5 billion in 2020. Pot in edibles and beverages and for vaping will still be outlawed for up to a year after legalization as the government takes more time to address the risks of those products.
Nelson’s pot empire includes the Willie’s Reserve and Willie’s Remedy brands, which market flower, vape pens and edible marijuana products.
“I bought enough of it, so I feel like I should be able to sell some back,” the 85-year-old singer said in a promotional video posted online.