William Sumner
The company behind the brand Curaleaf is going public in Canada. On July 26, 2018, PalliaTech Inc. announced that it has entered into an agreement with Lead Ventures Inc. (LEAD) to combine their businesses, with PalliaTech shareholders gaining a controlling interest in Lead Ventures.
PalliaTech is a holding company specializing in the medical cannabis industry with operations in 10 U.S. states on both the East and West coast. Its subsidiaries are focused on cultivating, processing, and dispensing medical cannabis for the company’s brand, CuraLeaf.
Formerly known as Maccabi Ventures Inc., Lead Ventures is a junior mineral exploration company that acquires, searches for, and evaluates natural properties in Canada.
Although merging with a non-cannabis company is not the most common way of going public, other cannabis companies have successfully completed similar methods.
Earlier this year, MedMen went public in Canada through a reverse takeover of the Canadian public company OutdoorPartner Media. Most recently, Dixie Brands Inc. announced that it too would go public through a reverse takeover of Academy Explorations Limited.
The combined company will retain the name Pallia Tech Inc., and the company’s share will list on the Canadian Securities Exchange (CSE). Outstanding common shares of both companies will be consolidated on a basis that is yet to be determined. All of Lead Venture’s directors and officers will be replaced by nominees named by PalliaTech.
PalliaTech intends to complete a brokered private placement of subscription receipts to accredited investors through a single purpose vehicle. Existing shareholders of Lead Ventures before the completion of the agreement will receive post-consolidated shares of the newly combined company; totaling to CAD$2.16 million, at a price per share equal to the PalliaTech Financing price.
Completion of the agreement is still dependent on several factors, such as shareholder and regulatory approvals. Approval of the transaction by shareholders is expected to occur during an annual general and special shareholder meeting of Lead Ventures. Trading of Lead Ventures’ common shares will remain halted until all the applicable regulatory authorities have accepted all necessary filings.
