Negotiating an international cannabis merger worth roughly $100 million is hard enough – but doing so during a global pandemic is downright daunting.
That’s what Israel’s IM Cannabis had to do when it agreed in late 2020 to acquire Toronto-headquartered Trichome Financial, a specialty finance company serving cannabis companies.
Because of the coronavirus pandemic, global business travel and international M&As had come to a virtual standstill.
To pull off the all-stock deal, IM Cannabis, a medical marijuana company with global ambitions, made use of modern technology and old-fashioned personal relationships.
It wasn’t easy.
During the talks, IM Cannabis CEO Oren Shuster said, there were periods when the deal wasn’t moving forward and the companies decided to disengage – like any negotiation.
But unlike other negotiations, this one took place primarily over Zoom.
“They visited our facility, and we visited their facility – everything by Zoom. It was not a simple process,” he said.
Shuster said the Trichome purchase will give IM Cannabis operations in the three biggest federally regulated marijuana markets in the world – Canada, Germany and Israel.
“We have international markets we know are going to expand, especially the (European Union) market. The only question is the pace of the growth, and I’m optimistic,” he said.
IM Cannabis expects the acquisition to close during the first half of 2021 and to complete the regulatory requirements to list on the Nasdaq in the U.S. this quarter.
Marijuana Business Daily talked with Shuster about the Trichome deal and creating a global cannabis business.
What challenges did you face when arranging this deal?
We’ve done this deal in a crazy world, with COVID, lockdowns. It’s almost impossible to do deals without the ability to travel, especially international deals.
We knew the people (at Trichome) previously. We met with them. We did this deal after we formed a relationship.
It’s very difficult for us to do deals, especially now, and I don’t think we’ll see a significant change in 2021.
How did technology help overcome those challenges?
Completely on Zoom. They visited our facility, and we visited their facility – everything by Zoom. It was not a simple process.
Everything was a challenge. We had crises. The deal (moved slowly) in some stages, and we had to recover.
But at the end of the day, it’s based on personal relationships. The deal (was done on Zoom), but we met with the people in the past. We had a relationship, and that is very important.
It’s difficult to do those kinds of deals because you’re doing it with people.
Is the demand for Trichome’s cultivation facility meant to be filled in Canada?
Primarily in Canada, but I think we will be able to add more demand to this facility, because we (Israel) have a need for more product.
Right now, we are importing products into Israel on top of what we’re supplying.
The ability to supply from our own sources…
Read More: mjbizdaily.com