Merger mania continues in the Canada's vibrant cannabis sector.
Today, West Kelowna-based Hiku Brands Company Ltd. announced that it intends to buy all the shares of Quebec-based Maïtri Group.
Maïtri was founded in Montreal last year with the goal of offering cannabis accessories in Quebec and educational information targeted at Quebec consumers.
Maïtri Group shareholders will receive $550,000 in cash and Hiku shares, with the possibility of up to an additional $1.2 million depending on various performance measures being met.
The deal comes two days after Hiju was created through the merger of B.C.-based DOJA Cannabis Company and TS Brandco Holdings Inc., which owns the Tokyo Smoke brand.
Hiku Brands began trading on the Canadian Securities Exchange on Wednesday (January 31). Its shares fell 13.73 percent today to close at $2.89 following news of the purchase of Maïtri Group.
Nearly a year ago, Tokyo Smoke bought Seattle based Van der Pop, which bills itself as a female-focused cannabis lifestyle brand.
Hiku grows its craft cannabis in the Okanagan Valley.
It's licensed to produce 660 kilograms per year and aims to increase this to more than 5,000 kilograms per year by the end of 2018. That will come with completion of what it's calling "Future Lab" in Kelowna.
Its CEO is Alan Gertner, who founded Tokyo Smoke, and its president is Trent Kitsch, the cofounder of Doja.
Aphria Inc. provided $12.5 million in financing in December to facilitate the merger of DOJA and Tokyo Smoke, which led to the creation of Hiku Brands.
"This strategic investment in and supply agreement with Hiku further bolsters our relationship with Tokyo Smoke and now DOJA, and reaffirms our commitment to expanding our product offering ahead of the recreational market," Aphria CEO Vic Neufeld said at the time. "This transaction has the twofold benefit of providing us access to strong brands, through Tokyo Smoke and DOJA, and craft-cultivated British Columbia bud, through DOJA."
Late last month, there were two much larger deals in the Canadian cannabis industry.
On January 29, Aphria announced an $826-million takeover of Nuuvera Inc. And on January 24, Aurora Cannabis Inc. declared that it was launching a friendly acquisition of CanniMed Therapeutics Inc. in a deal valued at $1.1 billion.
Both those transactions still require the approval of regulators.