Tweed (V.TWD) buys out former medical marijuana suppliers on eve of big launch

Chris Parry Chris Parry, Stockhouse.com
0 Comments| April 3, 2014


If the last few months have seen a swathe of hopeful changes of direction among companies hoping to make it big in the Canadian medical marijuana sector, a large shadow loomed over every crazy share increase and baffling news release.
 
Tweed (TSX:V.TWD, Stock Forum), a newly formed company that will list on the TSX Friday, has received approval to build a 50,000 square foot facility in Smith Falls, Ontario, literally across the street from an RCMP office. But marijuana takes time to grow, and neither the crop nor the facility will be ready to produce medicine for Canada’s 40,000 registered patients tomorrow.
 
Tweed’s solution? Buy up the supply from formerly licensed growers who, under Health Canada’s new system, may otherwise need to destroy their crops and seeds once an injunction by a federal judge ends.
 
The company today announced it “has completed an acquisition of medical marihuana seeds and plants from certain growers licensed under the Marihuana Medical Access Regulations (MMAR) in advance of the April 1, 2014 deadline for transfers to occur.”
 
“The Marihuana for Medical Purposes Regulations (MMPR) allowed for the transfer of seeds and plants from growers licensed under the MMAR up until the end of March 2014 with authorization from Health Canada.”
 
The company says it has completed transactions with a number of growers under the old licensing rules, allowing it to acquire over 60 new strains of product.
 
The presumed undersupply of strains that deal with specific ailments was the core reason a Health Canada directive to formerly licensed growers to cease operations was subsequently stayed by a judge, pending trial.
 
“With the addition of the newly acquired strains, Tweed will have over 80 strains it can offer patients,” says the company.
 
“In addition to providing Tweed customers with additional variety, these purchases were undertaken to assist Tweed in ensuring that it had sufficient future inventory to meet demand, which is already showing signs of exceeding short-term production capacity. In the medium-term, Tweed believes that with those acquisitions which were completed and an acceleration of its own in-house growing capabilities, it will have sufficient supply available to meet expected demand.”
 
One shipment to the company has been held up by the RCMP for confirmation of shipment authorization.
 
The company is expected to open trading at $0.85, according to Chairman Bruce Linton in an article on the Huffington Post. 65% of the float, some 23 million shares, will be available on the market.

Tags: INDUSTRIALS CONGLOMERATES

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