The move by the Wakefield, Massachusetts-based company, which also owns cannabis cultivation operations, comes ahead of going public on Monday in what will be one of Canada’s largest reverse takeovers. Documents available to potential investors listed the target issue size as $150 million.

Curaleaf’s strong showing comes as cannabis stocks are taking a beating over concerns that the sector is overvalued. The Horizons Marijuana Life Sciences Index ETF tumbled 6.1 percent on Wednesday, leaving it 30 percent down from an all-time high it hit the day before Canada legalized recreational cannabis on Oct. 17.

Curaleaf will raise the equity through a private placement that converts to a public company.

The cannabis industry saw a flurry of capital raisings and mergers ahead of the legalization of recreational marijuana in Canada.

The offer is set to be priced at C$11.45 per subscription receipt, near the top end of the previously disclosed range of C$8.56-C$11.47 per receipt, according to one of the people. A subscription receipt can be exchanged for the underlying security upon the deal’s closing.

Curaleaf’s fundraising is among the biggest equity offerings in the sector and has attracted more than 100 institutional investors, one of the sources said.

The offer is expected to be priced as early as Wednesday, the people said.

An external spokesman for Curaleaf declined to comment. The sources declined to be named as the matter is not public.

Reverse takeovers (RTOs) allow companies to go public by rolling into a listed shell corporation and typically have a faster timeline than a traditional initial public offering.

RTOs have emerged as the preferred route for most U.S. cannabis companies seeking to go public.

Curaleaf’s listing will be the biggest-ever RTO on the Canadian Securities Exchange (CSE), the exchange said.

Curaleaf, which owned 28 dispensaries in nine U.S. states as of Sept. 7, is turning to Canada as a federal prohibition of cannabis in the U.S. makes raising capital there a challenge. It expects to increase the number of dispensaries in its network to 41 by the end of the year.

Currently, 49 companies with U.S. cannabis interests are listed on the CSE, out of a total 106 marijuana issuers, according to data from the exchange. U.S. cannabis listings on the CSE by RTO this year include retail chain MedMen Enterprises and Green Thumb Industries.

Even though marijuana remains illegal under U.S. federal law, the United States is the world’s biggest cannabis market, with California alone expected to have sales of $5.1 billion this year, according to Arcview Market Research. Companies are eager to get a slice of that pie.

Investment banks GMP Securities and Canaccord Genuity are leading the offering.

The post U.S. pot firm Curaleaf to triple planned equity offering appeared first on Alberta Farmer Express.

The Canadian Securities Administrators (CSA), which conducted a review of disclosure practices of 70 Canadian and U.S. cannabis producers, said some companies were inconsistent in complying with Canadian securities requirements on issues such as providing forward-looking information and giving guidance for balanced disclosure.

“Licensed cannabis producers often did not provide sufficient information in their financial statements and management’s discussion and analysis for an investor to understand their financial performance,” the CSA said in a report posted on the websites of provincial securities regulators.

The move comes ahead of next week’s expected legalization of recreational cannabis in Canada. Cannabis stocks have been on a tear over the past year in anticipation of strong demand following legalization.

“Issuers in the industry in a very short time period have graduated from being on the fringe to having multi-billion dollar market caps,” said James Munro, co-chair of the cannabis practice at law firm McMillan.

“The CSA is reconciling the size of the industry with the type of meaningful disclosure that is required of such companies.”

The review appears to have already had an impact on cannabis companies.

The CSA, an umbrella group representing provincial securities regulators, singled out companies with U.S. cannabis operations for improving disclosures, while saying that overall licensed producers took steps to improve disclosure.

As a result of the review, 74 per cent of issuers with U.S. cannabis-related activities took action to beef up disclosure and 17 per cent refiled their most recent MD+A documents.

CSA did not name any producers in its review.

— John Tilak reports on Canadian corporate governance and mergers/acquisitions from Toronto.

The post Regulator finds cannabis company disclosures inadequate appeared first on Alberta Farmer Express.

The deal signals an easing of tensions following an offer in November by Aurora, Canada’s second-biggest listed cannabis producer, to buy CanniMed in an all-stock bid that was met with resistance from the target and a $725 million lawsuit filed last week.

The combined company formed by a deal would inch ahead of industry leader Canopy Health’s $7.1 billion market value. The deal-making and fundraising frenzy comes as weed companies jostle for prime position ahead of the country’s legalization of recreational use of marijuana in mid-2018.

Buying CanniMed and Newstrike would boost Aurora’s capacity to meet the higher demand at home, as well as overseas as more countries approve the use of medical marijuana.

Aurora had strongly opposed a plan by CanniMed to purchase Newstrike. On Wednesday, Newstrike shareholders voted in favour of that deal, but on Thursday CanniMed postponed its investor vote on the acquisition to engage in talks with Aurora.

If the three companies fail to reach a deal, CanniMed could further postpone the vote, according to the people, who declined to be identified because they were not authorized to speak publicly about the matter.

While Aurora now prefers to acquire both companies, it could also settle for just CanniMed if talks with Newstrike fail, the sources said.

Under Aurora’s original bid, which was capped at $24 a share, if CanniMed were to buy Newstrike, Aurora’s offer would not proceed.

The sources said Aurora is ready to raise its offer price for CanniMed and would look to use its own stock, which has been on a tear alongside the rest of the Canadian cannabis industry.

CanniMed shares closed up 6.7 per cent at $34.77 in Toronto. Aurora stock was up 3.9 per cent at $13.48. Newstrike gained five per cent to $1.47.

“We said from the beginning that we’d be happy to sit down for friendly, collaborative discussions, so we’re going in with an open mind,” Aurora chief corporate officer Cam Battley told Reuters on Friday. “Perhaps there’s an opportunity to do something on a friendly basis.”

A CanniMed representative declined to comment. A Newstrike representative did not immediately respond to a request for comment.

With this latest development, both Aurora’s offer for CanniMed and CanniMed’s bid for Newstrike would be scrapped and replaced with a new friendly agreement, the people said.

The deal could be announced as early as Monday, the people said, while cautioning that there is no certainty an agreement would be reached.

Aurora had more than $500 million of cash and marketable securities as of Dec. 31, it said on Jan. 2.

The talks between the three parties started earlier this week, the people said.

— Reporting for Reuters by John Tilak and Nichola Saminather.

The post Cannabis firm Aurora in talks to buy both CanniMed, Newstrike appeared first on Alberta Farmer Express.

The move comes as activist investor Elliott Management Corp. has been pushing the company for changes. BHP is working with an investment bank for the potential stake sale in its partly-built Jansen potash project, the sources said this week.

For BHP, the move will help share the risk of developing the mine and reduce its exposure to the project, said the sources, who asked not to be identified because the deliberations are confidential.

BHP laid out options for the Jansen project in an investor presentation dated Aug. 22, saying it could wait, find a partner, divest or optimize it. BHP spokeswoman Bronwyn Wilkinson said it was too early in the process for the company to have determined the size of a potential stake sale.

“If you bring in a partner, you can share the capital and risk and, depending on who the partner is, help secure an off-take (supply agreement) or offer expertise,” Wilkinson said.

BHP, which will keep control of the mine, is not tied to the 25 per cent, and the final stake sold could depend on offers, the people said. BHP’s four-million tonne mine would cost about $8.5 billion to build, with more than half of that still uncommitted (all figures US$).

The company does not need the cash either, so it is not in a hurry, the people said. The company’s underlying profit surged to $6.7 billion in the recent fiscal year.

BHP’s U.S.-listed shares jumped, rising as much as 4.5 per cent to hit a two-year high of $43.60. They were up 2.3 per cent at $42.68 in afternoon trading in New York.

The potash mine at Jansen, about 70 km southeast of Humboldt, has become the latest front in the battle between BHP, the world’s top miner, and Elliott, a hedge fund that has challenged some of the world’s biggest companies.

Elliott’s demands include getting BHP to spin off its U.S. oil and gas assets, doing away with its dual-listing structure, and improving shareholder returns. BHP earlier this week said it would exit the U.S. shale oil and gas business.

In July, BHP potash analyst Paul Burnside made a case for potash, arguing that a counter-cyclical investment would help position the company for rising demand for the commodity over the next few decades.

Elliott attacked BHP’s plans to enter the potash fertilizer market, which is facing over-supply and sluggish prices. Analysts are cautious about the sector.

Global prices of potash, a crucial crop nutrient that helps corn and other crops withstand stress, are low due to a slump in farm prices and rapid expansion of mining capacity by producers.

The company said this week it would not seek board approval in 2018 as expected for capital to finish building Jansen due to uncertainty in the potash market. Some analysts interpreted the comments as delaying the project. Production could start in the mid-2020s, BHP said.

The potash asset is expected to attract interest from global players, including Indian and Chinese firms, the people said.

Since India relies entirely on imports for potash, Indian fertilizer companies looking to sidestep price volatility could look to take advantage of attractive valuations.

Indian Potash Ltd., IFFCO, Deepak Fertilisers and Petrochemicals Corp., Rashtriya Chemicals and Fertilizers, Coromandel International are some of the top potash players in India.

Last month, Reuters reported that Indian agrochemicals producer UPL Ltd. is exploring a bid of more than $4 billion for the agrochemicals business of Platform Specialty Products Corp., in a sign that Indian agriculture firms were actively scouting for North American assets.

— Reporting for Reuters by John Tilak in Toronto and Greg Roumeliotis in New York; additional reporting by Rod Nickel in Winnipeg.

The post BHP said exploring stake sale in Saskatchewan potash mine appeared first on Alberta Farmer Express.

About 99 per cent of the votes from both groups of shareholders are in favour of the transaction, said the source, who spoke on condition of anonymity as the matter is not public. About half of the votes have come in, the source said.

The merger requires two-thirds support of votes cast by shareholders of each company.

On Nov. 3, shareholders of Agrium and Potash will vote in separate meetings in Calgary and Saskatoon, respectively, to approve the deal.

Last month, PotashCorp and Agrium agreed to join forces in an all-stock deal that will allow Potash shareholders to own 52 per cent of the new company, with the rest going to Agrium shareholders.

Some Agrium investors said at the time they were uneasy about the deal because it would give them greater exposure to the slumping crop nutrient potash. Agrium shares fell when the deal was announced.

PotashCorp CEO Jochen Tilk said on Thursday that early votes were “overwhelmingly in favour of the merger.”

Investor advisory firms Institutional Shareholder Services and Glass Lewis are supporting the merger.

The deal, combining the world’s largest fertilizer capacity of PotashCorp with Agrium’s farm retail business, the biggest in North America, still faces regulatory scrutiny in Canada and the U.S. Closing is expected in mid-2017.

In North America, the new company will control about two-thirds of potash capacity and nearly one-third of phosphate and nitrogen capacity.

PotashCorp on Thursday reported a lower third-quarter net income at $81 million, or 10 cents per share, down from $282 million, or 34 cents, a year earlier. It was the second smallest profit per share in nearly 12 years, according to Thomson Reuters data.

Sales dropped 26 per cent to $1.14 billion, but beat the average analyst estimate of $1.04 billion, according to Thomson Reuters I/B/E/S.

PotashCorp’s average realized price for potash in the quarter was $150 per tonne, down from $250 a year earlier. Its potash sales volumes rose 16 per cent to a record 2.5 million tonnes, as shipments resumed to Chinese and Indian buyers.

The company also cut the upper end of its full-year earnings forecast to 45 cents per share, from 55 cents. The company retained the lower end at 40 cents.

— Reporting for Reuters by John Tilak in Toronto and Rod Nickel in Winnipeg.

The post Agrium/PotashCorp merger set for shareholder approval appeared first on Alberta Farmer Express.

Saskatoon-based PotashCorp and Calgary’s Agrium confirmed Tuesday they were in preliminary merger talks, toward a deal that would create a fertilizer and farm-retailing giant.

Canada is likely to look more favourably on the combination because its regulators more strongly weigh the potential for achieving efficiencies such as reducing overhead and optimizing shipping. This position has its roots in a desire by policymakers to strengthen companies operating in Canada’s smaller market.

“The efficiencies defense will certainly loom large,” said Nikiforos Iatrou, competition group chair at law firm WeirFoulds in Toronto.

“It’s possible that in this case the efficiencies win the day in Canada but don’t carry the day in the United States.”

The defense was highlighted this year, when the Canadian Competition Bureau approved a deal between Superior Plus Corp. and Canexus Corp., saying that efficiency gains would be greater than the anti-competitive effects.

The U.S. Federal Trade Commission blocked the same deal, which was then scrapped.

U.S. to focus on product pricing

PotashCorp and Agrium have significant operations in the U.S., which would spur review by the Federal Trade Commission or the Justice Department.

U.S. regulators would focus primarily on prospects for the deal to raise prices for the companies’ fertilizer products, which account for as much as one-third of input costs for U.S. corn farmers.

A combined PotashCorp and Agrium would control 62 per cent of potash capacity in North America, 30 per cent of phosphate production capability and 29 per cent of nitrogen capacity, according to National Bank Financial.

Both U.S. regulators have taken an aggressive stance on mergers, said Andrea Murino, co-chair of competition at law firm Goodwin Procter in Washington.

“Just based on the market shares, the deal is going to get some really close scrutiny,” she said.

The prospect of having only two big U.S. potash sellers, down from three, might worry antitrust enforcers, said Ethan Glass, a U.S. Justice Department veteran now at Quinn, Emanuel Urquhart + Sullivan in Washington.

The merged company could sell Agrium’s potash mine at Vanscoy in west-central Saskatchewan to ease those worries, he said.

Agrium-PotashCorp’s clout could also be diluted by other developments with rival miners Mosaic Co. and K+S AG planning to add capacity in North America.

Under the Canadian review, PotashCorp and Agrium could argue their merger would enable the Canadian company to be a stronger global player.

“This idea of creating a ‘national champion’ pops up from time to time — and the federal government is often pressured to consider measures that would be supportive of this,” said Subrata Bhattacharjee, vice-chair of competition for law firm BLG in Toronto.

The deal may also catch the attention of regulators in China, a major potash buyer. Agrium, PotashCorp and Mosaic sell potash offshore through jointly-owned Canpotex.

Huy Do of law firm Fasken Martineau in Toronto said Chinese regulators may see the deal as an opportunity to dismantle Canpotex.

— Reporting for Reuters by John Tilak in Toronto, Rod Nickel in Winnipeg, Diane Bartz in Washington, D.C. and Michelle Price in Hong Kong.

The post Fertilizer merger faces easier approval at home than in U.S. appeared first on Alberta Farmer Express.

San Antonio-based CST owns and operates convenience stores and gas stations in Canada and the U.S., and it controls the general partner of gas station company CrossAmerica Partners LP.

CST declined to comment.

In a statement Tuesday, Couche-Tard said it is in discussions “with third parties regarding possible business transactions.

“No formal agreements have been reached,” it added.

Laval, Que.-based Couche-Tard’s shares closed up 3.1 per cent, while CST’s stock ended the day 6.3 per cent higher.

The move highlights the level of consolidation in the convenience store sector and reinforces Couche-Tard as one of the most acquisitive players in the industry.

CST’s operations in Canada cover over 870 retail sites, mainly under the Corner Store and Depanneur du Coin brands, in Ontario, Quebec and Atlantic Canada.

Its Canadian stores’ offerings include standard convenience-store snacks and beverages and, in many cases, market sections offering sandwiches, salads and fresh produce.

Couche-Tard’s operations in Canada, meanwhile, are under the Couche-Tard, Mac’s and Circle K brands. The company operates over 1,400 stores in 10 provinces and the Northwest Territories and supplies almost 400 affiliated stores.

The news comes about two months after Reuters reported that Couche-Tard and Japan’s Seven + i Holdings Co. Ltd. had submitted offers to acquire CST.

The Wall Street Journal first reported that Couche-Tard was close to buying CST.

— Reporting for Reuters by Lauren Hirsch; writing by John Tilak. Includes files from AGCanada.com Network staff.

The post Couche-Tard reported in lead to buy Corner Store chain appeared first on Alberta Farmer Express.

Canadian hedge fund West Face Capital, which pushed SNC-Lavalin to sell its AltaLink business for about $3.1 billion in 2014, also wants SunOpta to look at board or management changes if sales don’t materialize, said the sources who spoke on condition of anonymity.

West Face’s move comes as SunOpta, whose brands include Nature’s Finest and Sunrich Naturals, has received interest from private equity firms, said two sources familiar with the situation.

While some of Toronto-based West Face’s demands are similar to Tourbillon’s, the two hedge funds are not acting in concert, the sources said.

West Face, SunOpta’s third biggest shareholder with a more than eight per cent stake, began the push about a year ago but has kept it private, one source said. Tourbillon, SunOpta’s largest stakeholder, went public with a May 27 letter to the board and chief executive officer.

SunOpta and West Face declined to comment.

Investors have been disappointed with SunOpta’s share price, which is down nearly 48 per cent over the past year. Some shareholders are concerned about the debt level, the integration of acquisitions and SunOpta’s sluggish performance in the high-growth organic foods market, the sources said.

After the Reuters report, SunOpta shares shot up as much as 6.3 per cent to $7.10 before easing to $6.92. Before the report, the stock was down about two per cent.

Last month, SunOpta’s board hired investment bank Rothschild Inc and law firm Davies Ward Phillips & Vineberg LLP to advise on strategic options and said it was in talks with its biggest shareholders.

SunOpta’s debt jumped to $482.8 million in 2015 from $83 million a year earlier after the acquisitions of Citrusource, Niagara Natural and Sunrise Growers.

A sale at less than $8 per share is unlikely to be acceptable to some of the major shareholders, one source said, adding that an asset sale was more likely in the near term.

The stock was down 2.1 per cent at $6.54 on Monday.

SunOpta set ambitious goals in April for gross margin and sales, including raising its overall gross margin to between 14 per cent to 16 per cent within three to five years from the current 11 per cent, said Eric Gottlieb, an analyst at D.A. Davidson & Co.

“They’ve made all these promises throughout the years, and they haven’t come through,” he said. Now the shareholders’ approach is, ‘let me see you do it,'” he added.

A strategic buyer, such as grain handler Archer Daniels Midland Co, the food processor and commodities trader, or Bunge Ltd, the agribusiness group, may be interested in buying SunOpta for its ingredient sourcing segment and then sell its consumer products division, Gottlieb said.

ADM declined to comment. Bunge could not be reached immediately for comment.

The post SunOpta pressured by shareholders after sluggish sales appeared first on Alberta Farmer Express.

The Toronto-based company has significant stakes of eight medical marijuana producers, including five licensed by regulator Health Canada. It will go public through a reverse takeover of a listed entity, with a ticker symbol on the TSX venture exchange of “MJN”.

The move shines a light on the Canadian medical marijuana industry, which is expected to reach $1.3 billion in a decade, though investors are also aware of the risks of betting on a new, untested market.

PharmaCan acquires large stakes, typically ranging from 10 to 30 per cent, in medical marijuana producers and is engaged in discussions to make more such investments. It also tends to look for seats on the boards of those companies.

“An investor that seeks exposure to the fast-growing medical marijuana industry would be interested in PharmaCan because it mitigates the risk of investing in the industry,” said Paul Rosen, CEO of PharmaCan.

“We’ve created a diversified, regionally based portfolio of licensed producers,” he added. “We’re the only company in Canada that has this significant an investment in this many licensed producers.”

PharmaCan’s stable of licensed medical marijuana producers includes British Columbia-based Whistler Medical Marijuana and Simcoe County, Ont.-based Peace Naturals Project. PharmaCan also owns 100 per cent of In The Zone Produce, a licensed producer based in B.C.’s Okanagan Valley.

“Competitive capitalism”

Buying into the company means an investor does not have the hassle of trying to decide which licensed producer to invest in, said Daniel Pearlstein, life sciences analyst at M Partners.

He said PharmaCan’s listing could benefit the broader industry. Marijuana companies that have gone public this year include T-Bird Pharma, Tweed Marijuana, OrganiGram Holdings and Bedrocan Cannabis. Earlier this week, Leamington, Ont.-based Aphria listed on the venture exchange.

“The medical marijuana industry in Canada is in a state of competitive capitalism,” Pearlstein said.

“Everyone is elbowing for a position, but everyone needs everyone else to succeed up to the point where supply and demand reach an equilibrium, and then the players can start battling it out.”

— John Tilak reports for Reuters from Toronto.

The post Canadian medical marijuana firm PharmaCan going public appeared first on Alberta Farmer Express.