The Labourers' Pension Fund of Central and Eastern Canada, Oakville, Ontario, has made a C$25 million ($18.8 million) investment into WeedMD, a cannabis company that is also based in the province, a spokeswoman for the fund confirmed.
The C$8 billion multiemployer pension plan's investment into WeedMD is part of transaction, in which WeedMD, a firm that produces and distributes cannabis to both the medical and adult-use markets, acquired Starseed Holdings, a company that provides cannabis to insured patients through drug benefit plans, the spokeswoman said in an email. The acquisition is valued at about $78 million, WeedMD said in a Nov. 29 press release.
"As consideration for the acquisition of all of the issued and outstanding shares of Starseed, WeedMD will issue 71.8 million shares, which have a total equity value of $78 million, to Starseed shareholders upon close of M&A transaction. The concurrent $25 million equity investment by LPF is separate to these amounts," the pension fund spokeswoman wrote.
WeedMD CEO Keith Merker said Monday in a letter to shareholders posted on the company's website that "through the combination of cash on Starseed's balance sheet and the new investment from LPF, WeedMD has secured $42 million of fresh capital."
With its C$25 million investment in WeedMD, the Labourers' Pension Fund of Central and Eastern Canada will own 29% of the cannabis company, Mr. Merker said.
