Tidal Royalty Corp. (OTC: TDRYF) (CSE: RLTY.U), a leading provider of royalty financing to licensed U.S. cannabis operators, is pleased to announce it has entered into a binding letter of intent (“Agreement“) to acquire certain assets that are strategic to Tidal Royalty from CannaRoyalty Corp. (CSE: CRZ) (OTC: CNNRF) (“CannaRoyalty“), a leading North American cannabis products and brands company.
Pursuant to the Agreement, Tidal Royalty will acquire a royalty entitlement and equity interest in Alternative Medical Enterprises, LLC, doing business as AltMed, (“AltMed“) a leading multi-state, vertically-integrated operator. The aggregate consideration for the acquisition is C$8 million, in a combination of cash and Tidal Royalty’s stock.
AltMed is led by former senior pharmaceutical executives and has captured market share by implementing pharma industry standards to the development, production and dispensing of medical cannabis. AltMed has vertically-integrated operations in both Florida and Arizona, pursuant to such states’ regulated cannabis programs, and currently has applications for licenses pending in Ohio. In addition to distributing its own award-winning product line (MüV™) of topicals, gels, concentrates and transdermal patches, AltMed has distribution partnerships with leading cannabis brands — including with Wana Brands, a leading producer of cannabis-infused products.
Pursuant to the Agreement, Tidal Royalty will acquire a royalty on U.S. and international sales of the MüV™ product line. Tidal Royalty will also acquire an equity interest in AltMed.
“We’ve been following AltMed for quite some time now and have watched them expand their footprint very strategically and methodically. They are led by an extremely entrepreneurial and capable management team and we feel that they are positioned to be a leading player in the U.S. industry. We are excited to be in this position and look forward to finding additional ways that we can support their growth plans,” said Paul Rosen, CEO & Chairman of Tidal Royalty. “This transaction was really made possible by our strong synergistic relationship with CannaRoyalty, a company whom we have a great deal of respect and admiration for. We are confident that our companies will identify additional mutually-strategic opportunities in the emerging U.S. regulated cannabis industry.”
“This Agreement advances our stated strategy of realizing value for shareholders on non-core assets. The gains from our successful investment in AltMed will provide CannaRoyalty with capital to continue to expand its distribution and brand network in the California market. We are confident that AltMed will be a valuable addition to Tidal Royalty’s portfolio, and as CannaRoyalty continues to grow and build a solid presence in California, we look forward to opportunities to partner with the experienced team at Tidal Royalty,” said Marc Lustig, Chairman and CEO of CannaRoyalty.
Closing of the transaction is subject to, among other things, the satisfactory completion of due diligence, which is currently underway, and the receipt of all corporate and regulatory approvals.
With the execution of this Agreement, Tidal Royalty has now entered into letters of intent with cannabis operators in Florida, Arizona, California, Nevada, Massachusetts and Illinois. In addition, Tidal Royalty is in the process of evaluating multiple additional opportunities across the U.S., including in New York, Ohio, Pennsylvania, Texas and Michigan. Tidal Royalty intends to provide further information on those discussions when the respective parties reach an agreement and execute letters of intent.
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