OTTAWA - Tweed Marijuana Inc. (TSX: V.TWD, Stock Forum) says it has bought Prime1 Construction Services Corp., owner of Park Lane Farms, for $3.6 million with the view to becoming a national provider.
Prime1 operates a medical marijuana greenhouse in Niagara-on-the-Lake, Ontario.
Ottawa-based Tweed says the acquisition will add more greenhouse space to its operations.
But industry insiders question the move as Tweed has struggled to get its much vaunted 150,000 square foot warehouse grow facility firing on all cylinders.
The company has sent out small amounts of product to consumers thus far but has had quality control issues and brought in outside consultants to attempt to fix problems that have limited their ability to produce thus far.
The move to buy an existing growhouse without an MMPR license, when the company's main facility is, at present, not yet entirely utilised, could be seen as a move to buy its way out of trouble.
Tweed says Prime1 Construction Services Corp. is going through the Health Canada review process to become a licensed producer of medical marijuana. The company says the acquisition will help it become a geographically diversified, multi-licensed public operation in Canada.
Tweed Marijuana is Canada's first publicly traded medical marijuana company and started trading on the Toronto Venture Exchange in April, and has a market capitalization of $114.6 million.
New regulations regarding medical marijuana were enacted by the federal government April 1. The move opened production up to the commercial sector.
As of late last month, Health Canada had received more than 850 applications from companies wanting to be medical marijuana suppliers.
Other companies, such as Medican (OTO:MDCN, Stock Forum), Creative Edge (OTO:FITX, Stock Forum) and Supreme Pharmaceuticals (CSE:C.SL, Stock Forum), are planning sizable grow facilities that will, if completed and licensed, double Tweed's current size.
-- With file by Chris Parry