Pot grower Tweed finalizes $30M takeover deal, moves closer to going public

OBJ Staff
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Medicinal marijuana grower Tweed has finalized its reverse takeover deal with LW Capital Pool (TSXV: LWI.H).

Clearford Industries CEO Bruce Linton

The stock-only deal will see LW CPI issue new shares in the company, which will be exchanged for all the shares of Tweed. The deal will give the current owners of Tweed just under 96 per cent of all shares in the combined company, which will be renamed Tweed Marijuana Inc.

The deal is valued at between $28.5 million and $29.9 million.

The purpose of the reverse takeover is to turn Tweed into a publically-traded company, Tweed chairman Bruce Linton told OBJ in January.

He said that the company chose to do a reverse takeover of a Capital Pool Company, a publicly-traded company with no assets other than cash, because it was a faster route to being listed than an initial public offering.

That speed was important because, last June, there was less than 10 months before the start of new regulations that allow for the production of the company’s product.

Those rule changes, which are set to come into effect in April, allow companies like Tweed to produce marijuana to sell directly to consumers who have a prescription for the drug. However, those companies aren’t allowed to advertise.

That’s the reason Tweed is so interested in becoming a public company: it helps to get the company’s name out.

“Being listed means we’re reliable and transparent,” Mr. Linton said during that January interview.

The deal would make Tweed the first medicinal marijuana company listed on the TSX and appears likely to make it the first marijuana grower traded on any major exchange.

The deal will see Mr. Linton become chair of the new Tweed. Other members of the company’s leadership team, including president and CEO Charles Rifici and CFO Gerald Leahy, will take similar roles at the amalgamated company.

It will also see Andrew Moffat, Larry Poirier and Deborah Weinstein, who are currently directors of LW CPI, join the board of Tweed. Mr. Moffat and Mr. Poirier will become directors and Ms. Weinstein will become the corporate secretary.

Tweed expects to start shipping marijuana to customers at the beginning of April.

Organizations: Tweed Marijuana, Capital Pool Company, TSX

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Recent comments

  • TL
    March 21, 2014 - 22:20

    Sadly health Canada's last minute decision this afternoon is going to stall everyone's hopes in this one...

  • Richard Relf
    March 21, 2014 - 10:40

    The potential for growth maybe limited in some respects by the Canadian drug laws, however any change towards decriminalization should positively affect the stock.

  • bill dvoretsky
    March 20, 2014 - 16:06

    Congrats to all. Any idea when thwe listing will happen and what symbol? Have a great day

    • David Fox
      March 22, 2014 - 08:20

      The symbol will be TWD, I would say the merger will be in the next week or so.

  • Pierre Tambellini
    March 20, 2014 - 15:08

    To whom it may concern, When at the earliest possible, will I be able to buy shares on Tweed Marijuana Inc. and where? I thank you in advance, Pierre Tambellini