The current reporting season is a narrative of failed deals and ever shakier foundations at the top end of cannabis town in Canada & the US. Here’s the latest to hit the courts.
Who’s next, we ask?
Bloomberg report …………A legal fight has emerged after Tilray Inc.’s deal to buy 420 Investments Ltd. for $110 million was terminated last week, with the Alberta-based retailer suing the Canadian cannabis producer for breach of contract and accusing it of dragging its feet on the deal following a “change of heart”, according to documents obtained by BNN Bloomberg.
Tilray announced its plan to buy the retailer, which currently operates 11 Four20 Premium Market cannabis stores in Alberta and is also known broadly as Four20, in late August for $110 million in a cash and stock deal. The deal – which occurred after five months of negotiations between the two companies – included $40 million in Tilray promissory notes based on future store openings, according to the statement of claim.
Both companies confirmed that Four20 filed a statement of claim against Tilray in an Alberta court late Friday after the Nanaimo, B.C.-based pot company decided to terminate its deal to buy the retailer.
“The defendants (Tilray) had a change of heart and no longer wished to proceed with the acquisition of Four20,” according to the statement of claim.
“In consequence, the defendants have not proceeded diligently under the arrangement agreement and are breaching the arrangement agreement by failing to take reasonable or timely steps to obtain the regulatory approvals needed to close the transaction.”
Four20 is seeking $110 million as well as an additional $20 million in damages, the statement of claim showed. Four20 will also not pay back a $7-million bridge loan provided by Tilray to finance the construction of future licensed cannabis retail stores.
“Four20 has been very open and transparent with Tilray throughout this process,” Four20 Chief Financial Officer Garrett Popadynetz told BNN Bloomberg in an email.
Read the full Bloomberg report at