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Canopy Growth Corporation (NASDAQ:CGC) (TSX:WEED) and Indiva Limited (OTCPK:NDVAF) (TSXV:NDVA), and its subsidiary, Indiva Inc., have entered into a license assignment and assumption agreement providing Canopy Growth exclusive rights and interests to manufacture, distribute, and sell Wana branded products in Canada which accelerates Canopy Growth's ability to leverage the Wana brand.
Canopy Growth and Indiva also entered into a contract manufacturing agreement, under which Canopy Growth will grant Indiva the exclusive right to manufacture and supply Wana branded products in Canada for a period of five years, with the ability to renew for an additional five-year term upon mutual agreement of the parties.
Transaction Terms
As consideration for Indiva entering into the assignment agreement and other related agreements in respect of the transactions described herein, Indiva will complete a non-brokered private placement offering of common shares of Indiva whereby Canopy Growth will subscribe for 37.2 million common shares for an aggregate purchase price of $2.2 million a price per common share of $0.0579 . The issue price was determined based on the 10-day volume weighted average trading price of the common shares on the TSX Venture Exchange during the 10 consecutive trading days ending on the last trading day immediately prior to the date hereof. Upon closing of the private placement, Canopy will exercise control and direction over 19.99% of the issued and outstanding common shares. The balance of the consideration will be paid by Canopy to Indiva as follows: additional consideration representing a value of $844,383 and a cash payment of $1.25 million on May 30, 2024.
Indiva intends to use the net proceeds of the private placement to satisfy its existing obligations under its license to manufacture and sell Wana branded products in Canada and for its costs and expenses related to the manufacture and supply Wana branded products under the manufacturing agreement.
Following the closing of the private placement, Canopy Growth will have the ability to nominate an individual as a board observer on the board of directors of Indiva. Canopy Growth and Indiva will also enter into a customary standstill and voting support agreement.
The private placement is expected to close on or before June 6, 2023 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the TSXV.
Photo: Benzinga edit with photos by Matthias Zomer on Pexels, squarefrog on Pixabay
