Halo Labs Inc. HALO AGEEF agreed to buy U.K.-based medicinal cannabis company Canmart Ltd. in exchange for about 72.5 million common shares.
The Toronto-based company confirmed the deal on Sunday.
Canmart, an importer and distributor of licensed cannabis products, provides cannabis to various U.K. pharmacies and clinics. It was founded by entrepreneurs David Dean and Darran Quin (pictured.
The acquisition is scheduled to close on or before Oct. 30, depending on when Halo receives approval from Toronto-based NEO Exchange Inc.
Halo agreed to issue some 27.9 million of its shares at closing. The two remaining tranches would be issued once certain performance milestones are achieved within the two years following the acquisition's finalization.
The company said it anticipates carrying out the sale of legally imported prescriptions to 50 unique patients and import of £150,000 of medical cannabis products at a cost that would yield profitable sales.
In addition, the company noted it would issue some 5.4 million of its shares to consultancy firm Anmoho LLC as a compensation.
Halo's co-founder and head of International Operations, Andreas Met, called the deal "exciting," and touted that the U.K. cannabis market is poised to surpass Germany's over the next four years.
It "potentially could be the largest single medical cannabis market in the world," Met said.
The vertically-integrated cannabis company operates within California, Oregon, and Nevada and internationally through Bophelo Bioscience & Wellness (Pty) Ltd. The subsidiary oversees cultivation and manufacturing operations in Lesotho.
Met further pointed out that Canmart's acquisitions, "fueled by our Lesotho grow operations—positions Halo to grow rapidly in the UK market, a key component of our international growth plan," adding that they intend to import product grown at Bophelo to the U.K. in the year to come.
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