An Ottawa-area company wants to become the first medicinal marijuana grower listed on the TSX Venture Exchange.
LW Capital Pool Inc, an Ottawa-based capital pool company, has reached a non-binding agreement to acquire Smith Falls-based Tweed, a company that is currently turning an abandoned chocolate factory into a legal grow-op.
Capital pool companies are traded on the TSXV but have no commercial operations and no assets other than cash. They are required to conduct a “qualifying transaction” – acquire assets, such as an active company, and begin commercial operations – within a certain time-frame.
If this deal goes ahead, it would be LW’s qualifying transaction.
The proposed stock-only deal would see LW acquire all of the outstanding shares of the privately-held Tweed. In exchange, the current owners of Tweed will receive to-be-issued shares that will give them just under 95 per cent ownership of LW.
LW has struggled to find a qualifying transaction. The company conducted its initial public offering in 2010, but was temporarily de-listed in the summer of 2012 after failing to find an appropriate investment.
The deal between LW and Tweed still requires the two companies to come to a definitive agreement and must be approved by the TSXV before it goes ahead.