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Canaccord Genuity, Columbia Care seek business combination

Canaccord Genuity Growth Corp. and Columbia Care LLC have entered into a letter of intent to negotiate a business combination.

According to an Oct. 17 news release, the deal will be structured as an amalgamation, arrangement, share exchange or similar transaction.

Canaccord Genuity, a Canadian holding company specializing in cannabis production and distribution, will be valued at C$60.7 million, while the U.S.-based medical marijuana producer and dispensary operator Columbia Care will be valued at US$1.35 billion.

According to Columbia Care CEO Nicholas Vita, the combination will allow both companies to leverage "their relative expertise and connectivity in the cannabis industry." Vita said increased access to capital resulting from the deal will drive growth beyond Columbia Care's presence in the U.S.

Columbia Care operates in 13 U.S. states, including New York, where it is headquartered.

In addition, Canaccord Genuity will make an institutional private placement of US$35 million of its class B shares at a per-share price of US$2.30 immediately before, and conditional on, completion of the combination. The placement is subject to the approval of Aequitas NEO Exchange Inc.

The companies have agreed to an exclusivity period, ending Nov. 15. The proposed deal remains subject to satisfactory due diligence, negotiation of definitive agreements and certain other customary conditions.