In one particular fell swoop, Cannbit bought Tikun Olam and hence ended this period of drama and uncertainty.
Final month, we reported on the legal scandal that forced Tikun Olam’s founder to resign and give up his shares of the firm. Due to alleged connections with criminal organizations, he was declared “legally unfit” to hold much more than five% % of any cannabis company’s stocks.
In its prime, Tikun Olam was the biggest healthcare cannabis producer in Israel, serving up to 10,000 sufferers each month. Nowadays, that quantity has dropped to roughly two,500 per month. The firm nonetheless owns a state-of-the-art expanding facility at Bet Yehoshua, which is up to regulatory requirements, as effectively as a processing facility at Tsiporit which is nonetheless beneath building.
Should really this processing facility come to fruition, it will be the biggest of it is type, capable of capable of obtaining solutions on the market place inside six months. As it stands, Tikun Olam at present oversees cannabis activities in quite a few various nations like the United States, Australia, and Greece.
Amid the current scandal, Tikun Olam came beneath fire from the Ministry of Well being and significantly of their experienced activity was restricted. They also started to shed their reputation as a worldwide business leader.
This left the firm with handful of choices but to sell. At the start off of negotiations, firm owner Yitzhak (Tzachi) Cohen demanded $100 million for Tikun Olam, as effectively as an ongoing percentage of future revenue. Nevertheless, they have been talked down significantly by Cannbit, one more Israeli healthcare cannabis firm.
Cannbit signed a memorandum of principles to obtain Tikun Olam for a total of $42 million, with a caveat to spend an more $18 million of Cannabit reaches a market place cap of $1 billion inside the subsequent five years. This total is significantly reduced than Cohen’s original asking cost.
“This deal positions Cannbit as a genuine top firm active along the entire cannabis worth chain,” mentioned Cannbit’s CEO, Ifat Kariv. “This deal will allow Cannnbit to position itself in advance of an providing overseas on the basis of Tikun Olam’s powerful brand. Its facility will be one particular of the biggest of its type in the globe.”
Cannbit using a public providing as their principal kind of financing in the acquisition. The firm warned that it is uncertain irrespective of whether a final agreement to obtain Tikun Olam will be reached.