Medical cannabis producer Wayland Group Corp. signed a nonbinding letter of intent to sell its Canadian business, including its Langton, Ontario-based production facility, to Cryptologic Corp.
Cryptologic is expected to issue 57.5 million shares priced at C$4 apiece to Wayland, representing about 70% of the issued and outstanding shares of the company on deal closing.
The Toronto-based cryptocurrency firm also agreed to assume liabilities related to the Canadian business and provide Wayland a pre-signing C$5 million subordinated bridge loan.
The transaction values Wayland's Canadian operations at about C$230 million, plus assumed liabilities. The companies agreed to a binding exclusivity period until Sept. 15.
Following the deal closing, Cryptologic is expected to become a single-purpose cannabis company.
The deal remains subject to completion of satisfactory due diligence, negotiation and signing of a definitive agreement and securing shareholders' approval. Closing of the transaction is also dependent on Cryptologic's sale of existing businesses and availability of at least C$25 million cash balance, as well as the potential reorganization of Wayland's Canadian business.
Meanwhile, Wayland is negotiating a potential sale of its remaining global asset portfolio in exchange for additional shares of Vancouver, British Columbia-based ICC International Cannabis Corp. In May, ICC acquired a 49.9% stake in Ontario-based Wayland's global asset and license portfolio in exchange for 300 million shares at 43 U.S. cents apiece.
Wayland expects to distribute Cryptologic and ICC shares to its shareholders upon completion of the transactions. Wayland shareholders are expected to hold 70% of Cryptologic and 60% of ICC.
Wayland noted the companies have not signed definitive agreements, and there can be no assurance that any transaction will occur on the expected terms and timeline.
Additionally, Wayland appointed President Matthew McLeod as company CEO. McLeod replaces Ben Ward, who resigned as director and CEO of Wayland.
Wayland said it also closed the planned acquisition of Colombia-based cannabis producer Colma Pharmaceutical SAS, and completed the purchase of assets in Argentina.
The company is working toward closing its acquisition of a 51% stake in U.K.-based medical cannabis company Theros Pharma Ltd.
Wayland said it decided against completing its transaction with Tropicann Pty. Ltd. and Territory Hemp and Cannabis Pty. Ltd. in Australia. In December 2018, Wayland agreed to acquire a 50.1% stake in Tropicann.