Westleaf (TSX-V: WL) (OTCQB: WSLFF) has entered into an agreement to merge with We Grow BC Ltd., an indoor cannabis producer located in Creston, British Columbia.
We Grow offers an ultra-premium cannabis brand called Qwest. The combination of We Grow’s Qwest brand with Westleaf’s production and retail assets will create a combined company that would be one of “Canada’s preeminent craft-at-scale cultivators, manufacturers, and retailers of ultra-premium cannabis products,” Westleaf said in a statement.
The merger will combine We Grow’s current production and Westleaf’s nearly completed Thunderchild cultivation facility, creating one of the largest craft producers in Canada with a core focus on producing cannabis and cannabis derivative products for the recreational market.
Under the agreement, Westleaf will purchase all of the issued and outstanding shares of We Grow, except its Class “H” non-voting common participating shares, in exchange for common shares in the capital of Westleaf. Each We Grow share will be exchanged for 4.264 Westleaf shares and each outstanding option to purchase one We Grow share will be exchanged for one Westleaf option to purchase 4.264 Westleaf shares pursuant to the Westleaf stock option plan currently in place.
Upon closing of the deal, Westleaf’s board will be reconstituted and will include three appointees of We Grow and two appointees of Westleaf. Westleaf’s officers will be reconstituted and will include Benjamin Sze as CEO, Scott Hurd as president, Taylor Ethans as CFO, Gary Leong as chief compliance officer, and Adam Coates as executive vice-president of commercial.
The arrangement is expected to close in mid-December 2019 and is subject to certain conditions.
Eight Capital is acting as the exclusive financial advisor and Borden Ladner Gervais LLP as legal counsel to Westleaf. While AltaCorp Capital is acting as the financial advisor and as legal counsel to We Grow.