At the tail end of 2018’s busy M&A season, Ohio-based Green Growth Brands launched a $2.1-billion (C$2.8-billion) bid to acquire Canadian cannabis producer Aphria Inc. The all-stock deal would provide Aphria shareholders with 1.5714 common shares of Green Growth in exchange for each Aphria share.

The proposed Green Growth share price for this transaction is about C$7, notably higher than its currently traded C$5 price. To meet the difference, the company would complete what it’s calling “brokered financing”—preemptively selling shares of its own stock at a premium— to raise C$300 million from investors interested in this deal.

The announcement of the all-stock shareholder proposal comes after “Green Growth engaged Aphria’s board to attempt to negotiate a friendly business combination,” according to Green Growth executives. Those talks did not move forward, leading to the Dec. 27 bid.

“I guess it’s technically a hostile takeover,” Green Growth CEO Peter Horvath told Marketwatch. 

Aphria has gathered an independent committee to look at the bid, which executives last week said “severely undervalues” the company. “Aphria believes that [Green Growth Brands] is attempting to acquire the company through a highly conditional offer at a significant discount to its current and future value,” according to Aphria executives in a public statement. What will come of that formal bid review remains to be seen, but there are plenty of recent headlines to inform the public of the context here. 

Green Growth Brands formed in February 2018 and completed a reverse-takeover of Toronto-based Xanthic Biopharma in November 2018, shortly after Canada’s regulated adult-use cannabis market opened for business on Oct. 17. The company debuted on the Canadian Stock Exchange several days after the close of that deal.

Green Growth currently owns and operates a majority of The+Source in Las Vegas, Nev., which includes a retail location, a production facility and a cultivation facility. The company was recently awarded seven additional retail licenses in Nevada, and, in December, the company also announced an option to acquire a medical and adult-use dispensary in Henderson, Nev.

Also in December, Green Growth executed a definitive agreement to acquire a retail license, production license and cultivation license from Just Healthy LLC in Massachusetts.

Aphria, meanwhile, has been publicly battling allegations of deceptive investment practices from short-seller hedge fund managers. Gabriel Grego, founder of Quintessential Capital, asserted that Aphria executives had been acquiring Latin American at inflated prices—companies in which Aphria executives had ownership stakes.

In a statement, Aphria called the allegations “false and defamatory.” On the Nasdaq, Aphria shares slid about 25 percent as these headlines ran in early December.

Then there are the alleged ties between Green Growth and Aphria that are catching attention this week.

On Dec. 28, Hindenburg Research published a report that points out that Aphria CEO Vic Neufeld sits on the board of advisers of Green Acre Capital, which runs a fund called GA Opportunities: the second-largest shareholder of Green Growth. (Hindenburg also joined in Quintessential’s allegations of deception in December.)

“We’ve held the line consistently that GA Opportunities was a fund that made an investment in us,” Horvath told Bloomberg. “We didn’t meet with the people that provided the money to them. We didn’t discuss it. It basically was brought to us, ‘Hey, we want to do a private placement with you,’ and we accepted that. Normally we don’t ask who’s behind the money because normally the answer is very complicated.”

(Neufeld stepped down as chair of Aphria’s board on Dec. 27. He remains the CEO.)

In its follow-up press release to the bid announcement, Aphria cited that very Green Acre Capital connection: “Aphria holds a passive investment in Green Acre Capital Fund II, which we understand has invested in numerous emerging cannabis companies, including GGB. The independent committee [reviewing the bid] is comprised of directors with no relationship to Green Acre Capital Fund II or GGB.”

Green Growth could become a strategic partner for Aphria, says Irwin Simon from CNBC.

Elsewhere among Green Growth’s largest shareholders is the Schottenstein family, a major retail dynasty that owns DSW and American Eagle (companies that Green Growth CEO Peter Horvath formerly ran as an executive). In 2017, the Schottenstein family jointly applied for a medical marijuana cultivation license in Ohio with Aphria Inc. Their application was unsuccessful.

“The Schottensteins, as far as I know, do not own any Aphria stock,” Horvath told Bloomberg. “Therefore, this is an appropriate transaction. I know that the board of Aphria and the management team of Aphria were not involved in developing this idea. In fact, what’s very visible is that they’ve rejected the idea. I feel everything’s fine, above board and transparent.”

NEW YORK, Jan. 02, 2019 (GLOBE NEWSWIRE) -- via OTC PR WIRE -- Greene Concepts, Inc. announced today that the Company has signed the definitive agreement to purchase the 60,000-sq.-ft. bottling and beverage facility that the company has been working to acquire. 

Under terms of the Definitive Agreement, all assets of the bottling and beverage facility including land and equipment will be merged into Greene Concepts Inc. The facility will be focused on a variety of beverage product lines including, but not limited to CBD-infused beverages, pH-Balanced, spring and artesian water, as well as enhanced athletic drinks in addition to other product offerings.  

All parties are working diligently to complete the final closing based on the terms of the recently signed definitive agreement. Final closing documents including title work are being prepared by the closing agent for the pending final closing.

The Company’s share structure remains at 673,112,401 shares of common stock outstanding with a float of 109,466,205.

VANCOUVER, Dec. 27, 2018 /CNW/ - AgraFlora Organics International Inc. (formerly PUF Ventures Inc.), an international cannabis company, is pleased to announce the acquisition of a large library of cannabis seed varieties from a private genetics firm based on the Sunshine Coast in British Columbia. AgraFlora has secured exclusive genetic acquisition agreements for a broad range of cannabis seed varieties from diverse lineages.

"The extensive genetic library of 184 unique cultivars will prove to be a valuable asset to our Company and the Propagation Services Canada joint venture and will allow for the cultivation of a diverse selection of high quality products at our 2,200,000-sq.-ft. greenhouse complex in Delta, BC," said Derek lvany, President and CEO, AgraFlora Organics International. "The library also allows us to work with other licensed producers and support our propagation business with a variety of high quality strains. Plant genetics is a key business driver of cannabis industry and by making this acquisition we are establishing a leadership position in the Canadian marketplace. Furthermore we are in discussions  with current and near term producers in other Geo-markets to sell them Genetics and plant cultures"

A total of 184 new varieties will be introduced in 2019 and cover the entire spectrum of low, intermediate, and high THC and CBD profiles. The genetics library includes medical and recreational strains of cannabis including the well-known classic sativa and indica and also includes rare ruderalis varieties a low-THC species of cannabis which is native to Central and Eastern Europe that have historical medicinal benefits. The library also includes cultivars not previously available in the Canadian market including landrace strains from central Asia and Southern Africa, and new strains that have been bred for medical needs with special terpene profiles new to the Canadian market.

The three principals of Vendure Genetics Labs have been in the genetics industry in Europe, Asia and Canada for the last 65 years combined and have agreed to exclusively work with AgraFlora.

SEATTLE, Jan. 2, 2019 /PRNewswire/ -- Today, GrowFlow, a provider of traceability software in Washington State, announced the acquisition of LeafOps POS. LeafOps serves the dispensary and retail market and has customers in seven states including California, Oregon, Arizona and Oklahoma.

Combining forces will allow GrowFlow to better serve vertically integrated markets, such as Colorado, where licensed cannabis businesses are allowed by local regulations to operate cultivation, manufacturing and also retail operations. Most U.S. states, as well as Canada, allow for vertical integration.

LeafOps Co-Founder and CEO Stephanie Yarbrough and GrowFlow Founder and CEO Rufus Casey both recognized the possible synergy when they became the first and second software providers approved to integrate with Washington State's new system in late 2017.

Casey stated, "We've historically provided software for growers, manufacturers and distributors, but were running into some issues where we found we were unable to help our customers. Here in Washington, in order for a wholesaler to sell cannabis to a retail store, they need to register the sale through the State's database. But when delivering to a non-GrowFlow customer, issues would crop up on the Retail side, and our support staff were unable to help- as we didn't have any visibility into the retailer's system. With the launch of GrowFlow's POS, we hope to be able to help customers all the way through the supply chain, a true 'Seed to Sale' platform at last."

"We're really excited about the acquisition and what this means for our existing customers and of course for GrowFlow as a company. We've got lots of new software tools coming out soon and with all the new States coming online, it's a great time to be involved in the industry."