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Canadian companies IGC Resources Inc. IGCGF and Westleaf Cannabis, which are currently in the process of merging their operations, have announced closing a private placement of subscription receipts.
What Happened
IGC Resources and Westleaf Cannabis managed to raise CA$20 million ($14.9 million) through their private placement. The companies sold 23.66 million subscription receipts, including 6 million receipts as the over-allotment option. One of the investors in the offering was Tilray Inc. TLRY, which acquired $2.9 million worth of receipts.
Each receipt will be automatically exchange into one unit of IGC. One unit will consist of one share of the company formed following the merger of Westleaf and IGC and one half of a purchase warrant that will allow acquiring one share at $1.30 for 24 months after the closing of the offering.
Why It's Important
Westleaf Cannabis is an Alberta-based company with operations in Alberta, British Columbia, and Saskatchewan. The company is focused on building a national cannabis retail chain under its brand name Praire Records. It also has a cultivation facility in Saskatchewan and a processing, extraction and manufacturing facility in Alberta.
Aside from Praire Records, Westleaf also operates a namesake brand of medicinal cannabis products and Loon, a brand of wellness cannabis products.
Westleaf Cannabis and IGC Resources on Oct. 5 announced a merger. The deal represents a reverse takeover transaction, which will allow Westleaf Cannabis to list on the TSX Venture Exchange.
What's Next
IGC and Westleaf expect to close their deal this month. Westleaf plans to use the proceeds from the offering to expand its operations. The company forecasts between 20 and 30 store openings in the next 12 to 24 months.
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