Voyager Life
Aquis-listed CBD brand Voyager Life is the latest cannabis firm to be eyeing an exit from the sector, a move that has proven popular with its investors.
In late June, Voyager announced that it had entered into an option agreement for a reverse takeover of Kansas based natural gas producer M3 Helium Corp.
As such, Voyager has issued 57,611,552 new ordinary shares to M3 Helium shareholders, representing 57% of the Voyager’s issued share capital as enlarged by the new ordinary shares.
Voyager has conditionally raised £864,468 by issuing new shares priced at 3 pence each, with investors being granted a warrant to buy another share for 6 pence each within two years for every two new shares bought.
The raised funds will support M3 Helium’s development, drill a new well, prepare necessary documents for re-admission to trading, and cover general working capital.
Crucially, should the deal be approved by shareholders during the company’s general meeting, taking place today (July 18), Voyager plans to exit the cannabis market altogether, and has put plans in place to dispose of its current cannabis portfolio.
It said that despite recent successes in its retail operations, ‘even taking account of the low valuations currently ascribed to CBD and cannabis companies’, its board believes the disposal of these operations will be possible in the near term without being a significant cash drain on the company.
Voyager plans to sell its plant-based health and wellness operations, including a manufacturing facility, e-commerce and wholesale activities, and three retail stores in Scotland.
“The Company’s manufacturing, e-commerce and wholesale operations can be profitable without the burden of the expenses of being a public company and, despite challenges on the high street, market rents for at least two of Voyager’s shops are now materially higher than the rent paid by the Company so transferring these leases in the short term is a realistic possibility.”
Its planned exit from the cannabis industry comes off the back of two failed acquisition deals over the past two months which would have significantly expanded the companies foothold in the industry.
In April, Business of Cannabis reported that a proposed merger with embattled UK medical cannabis cultivator Northern Leaf had fallen through.
The proposed deal would have valued the newly combined entity at £5m based on Voyager’s share price at the time, assuming a ‘deferred consideration’ is paid in full.
According a trading update in June, the last-minute cancellation of the deal amid concerns that its fundraise would not be sufficient to meet Northern Leaf’s needs had taken its toll on Voyager’s financial position.
With this significant drop in value preventing it from pursuing an additional fundraise and the failed deal meaning no working capital is available to ‘acquire additional equipment for its manufacturing division’, the company quickly ‘identified a new merger partner’.
This unnamed partner was reportedly a European company that would have been ‘transformative on the scale of Voyager’s operations as well as opening up several new markets’.
Despite working with the company over the last six weeks to agree heads of terms in principle, the company once again pulled out of the deal at the eleventh hour, putting a significant strain on the companies financial position.
Notably, Voyager’s CEO Nich Tulloch is set to rejoin fellow CBD company Chill Brands, of which he was previously the CEO, as a Non-Executive Director.
European cannabis firms believe now is the ‘perfect time’ to go public
Cannabis rescheduling in the US is poised to provide the embattled industry with a sorely needed financial boost, set to have ramifications for companies across the globe.
While the most immediate impact will be tax breaks, which are expected to divert billions back into the pockets of the US’s largest multi-state operators, the most significant impact globally is likely to be the loosening of restrictions around major financial institutions.
Although cannabis will still be federally illegal, reclassifying it as a Schedule III substance is expected to mean risk averse institutions like banks, insurance companies and major financial markets will begin opening up to the cannabis industry.
With rescheduling making its way through the legislative procedure, a number of European companies are already preparing to capitalise on these new freedoms, targeting listing on the NASDAQ.
According to a report in the Financial Times, UK-based medical cannabis distributor Grow Group is planning an IPO on the exchange early next year, targeting a valuation of more than £100m.
As Business of Cannabis has previously reported, Grow has been targeting a listing on the London Stock Exchange (LSE) since 2021.
In 2022, its CEO Ben Langley told said that it had come close to ‘pushing a button’ on an IPO numerous times, and had been consistent both with its private investors and publicly that its aim was always to be a publicly listed company.
He said at the time: “I feel like that is likely to be within the next 12 months. We continue to watch this space prudently. We’re not just going to jump into it blindly.”
Despite this long-held ambition, the company has turned its sites across the Atlantic, suggesting that the NASDAQ would help the company achieve a higher valuation.
Wellford Medical, a newly combined medical cannabis company consisting of Cannaray Limted, Therismos and Canadian cultivator Aqualitas, is also reportedly targeting a listing in the US.
Its Co-Founder and Chief Business Officer, Joshua Roberts, who spearheaded the companies rebranding at Cannabis Europa last month, told the publication now ‘could be the perfect time’ to list on the NASDAQ and ride the new wave of positive sentiment towards cannabis.
Somai Pharmacueticals, which recently significantly expanded its European footprint with the acquisition of RPK Biopharma from Akanda, similarly believes now may be the perfect time to go public.
Its CEO, Michael Sassano, said that he is seeking a €250m valuation on the US exchange, alongside a secondary listing on the Toronto Stock Exchange, or LSE.
Despite this new found optimism, both investors and companies will likely remain cautious of a repeat of the ‘greenrush’ seen in 2018–2020, where a rush of positive sentiment drove huge overvaluations of companies, from which few have been able to meaningfully recover.
IM Cannabis
IM Cannabis (IMC) has consolidated its shares for a second time in order to bring its share price back above the $1 threshold to avoid being delisted from the NASDAQ.
On July 12, IMC announced that its common shares were now trading on a 6:1 post-consolidated basis on both the Canadian Securities Exchange and the NASDAQ.
Following the consolidation, the number of common shares has been reduced from 13,394,136 to 2,232,357.
In August last year, IMC received its second warning from NASDAQ regarding its share price, months after pushing through a share price consolidation to remain on the exchange.
Business of Cannabis reported in July 2022 that IMC had received its first minimum bid price warning from NASDAQ, with the company forced to resort to a 1:10 reverse stock split in November force its share price back above the threshold.
