Canadian cannabis company TerrAscend said on Mondayit is terminating what was initially a $118 million purchase of Nevada-based Gravitas Nevada, becoming the latest proposed acquisition to fall victim to falling stock prices.
The acquisition, which includedThe Apothecarium retail stores in Nevada and California, called for Toronto-based TerrAscend to pay $33.5 million in cash and 625 proportionate voting shares in the equity of TerrAscend equivalent to 625,000 common shares of the company.
But because TerrAscend’s stock price has dropped by about 50% since the deal was first announced, the current deal would have been valued at about $35.3 million, according to calculations by Craig Behnke, an equity analyst forMarijuana Business DailysInvestor Intelligence.
Soon after the deal was originally announced on Feb. 11, 2019, Gravitas CEO and co-founder Ryan Hudson described the pending purchase as a good fit.
With the deals collapse, TerrAscend paid $3 million to Gravitas as required under the purchase agreement.
TerrAscend is no longer liable for the remaining $30.5 million and 625,000 company shares.
This deal is the latest in a number of cannabis-industry acquisitions thathave collapsedin recent months as companies seek to conserve cash amid dropping stock prices.
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Originally posted on TerrAscend ends $118 million buy of Nevada marijuana firm via Cannabis Industry News
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