Akanda Corp Acquires Bophelo And CanMart From Halo Collective Creating International Medical Cannabis Co.

On Thursday, Halo Collective Inc. HALO HCANF (Germany: A9KN) announced the completion of its previously-announced share purchase transaction with Akanda Corp.

The transaction creates two stand-alone entities, Halo, which will continue to focus on the North American adult-use cannabis market, and Akanda, which will focus on medical cannabis for international markets, Kiran Sidhu, CEO of Halo, explained.

This milestone achievement allows the Canadian-based company to bring medical cannabis products from Africa to patients in the UK and Europe. Akanda also appointed Dr. Aslihan Akkar-Schenkl as president, which will allow the company to further establish its footprint in the international market. A registered pharmacist and European patent attorney, Akkar-Schenkl will be responsible for Akanda’s pharmaceutical strategy and operations, quality assurance, and more.

“We are focused on driving positive changes and improving the quality of life for employees and individuals within the communities we operate in and serve. We believe that Akanda is equipped with one of the industry’s best platforms that will help us cater to patients’ needs and gain market share in the international cannabis market,” Tej Virk, CEO and director of Akanda told Benzinga.

What Happened?

Prior to closing the transaction, Halo completed an internal reorganization, under which each of Bophelo Bio Science & Wellness Pty. Ltd. and CanMart Ltd. became, directly or indirectly, wholly-owned subsidiaries of Cannaheath Limited, a company registered in Malta, which at the time was a direct wholly-owned subsidiary of Halo.

Under the terms of the agreement, Halo exchanged 100% of the issued and outstanding shares of Cannahealth to Akanda in exchange for 13.13 million common shares in the capital of Akanda, representing deemed consideration of $13.1 million, which is equal to Halo's book value of Bophelo and CanMart.

"The separation provides each business with the flexibility to pursue its unique strategy and optimize its own capital structure, which we believe will lead to long-term success and value creation," Sidhu said.

The transaction also substantially decreases Halo's overhead spending by roughly $9.6 million annually as Akanda intends to be self-funding, taking the company one closer step to profitability, Halo's CEO added. 

Following the completion of the transaction, Halo owns approximately 68.3% of the issued and outstanding Akanda shares.

In addition, Halo and Akanda entered into an investor rights agreement that provides the Halo board observation rights and the right to nominate a director to the Akanda board of directors in certain circumstances. Philip van den Berg, the CFO and a director of the Halo, is currently serving as its nominee on Akanda's board of directors.

Akanda Issues $6.6M Secured Convertible Debenture To Halo

As part of the transaction closing, Akanda issued a secured convertible debenture to Halo in the principal amount of $6.6 million in exchange for setting off all outstanding indebtedness owed by Bophelo and Canmart to Halo.

What's Next?

Virk said that Akanda is ready to reach international markets via multiple channels, including through CanMart, the company's licensed UK-based importer and distributor, Cantourage, Europe-based EU GMP providers of medical cannabis, as well as through other progressive parts of the supply chain that it builds.

"At our GACP-certified Bophelo campus in Lesotho, we're leveraging the country's ideal growing conditions and exceptional talent pool to produce medical cannabis that we believe will be of the highest quality at an extremely competitive cost," Virk added.

More recent news from Halo Collective:

• Cannabis Movers & Shakers: Acreage, MedMen, Halo Collective, Fire & Flower, Cronos Group, Perfect Union
• Halo Collective Acquires Huge Indoor Grow Facility In OR, Will Open More Cannabis Dispensaries Soon
• Red Light Holland, Halo Collective Create JV Targeting Oregon Medicinal Psychedelic Market

Photo: Courtesy of Akanda Corp