On January 15, 2024, Red White & Bloom Brands Inc. (CSE: RWB) (OTC: RWBYF) ("RWB") announced that, in connection with the proceedings of Aleafia Health Inc. and certain of its subsidiaries under the Companies' Creditors Arrangement Act, the parties have successfully closed the previously announced sale transaction. Total consideration for the transaction was $31,667,700.

The acquisition provides several strategic benefits to RWB shareholders through the ability to leverage capabilities garnered from:

  • Three core sales channels: recreational, medical and international.
  • One of Canada’s largest virtual medical cannabis clinics.
  • An 86 acre, low-cost, outdoor cultivation site located in Port Perry, Ontario, which is one of Canada’s largest outdoor cannabis cultivation facilities.
  • A 65,000 square foot, federally licensed, EU-GMP specified cultivation, processing, and packaging facility strategically located in rapidly developing Southwestern Ontario industrial hub Paris, Ontario.
  • An established portfolio of loyal cannabis brands in both adult use (recreational) and medical channels.

As part of the transaction, RWB also acquired a 9.4% ownership interest in One Plant (Retail) Corp., which operates a network of over 40 corporately owned and franchised cannabis retail locations in Ontario.

Pursuant to the transaction, RWB (PV) Canada Inc. (the "Purchaser"), a wholly-subsidiary of RWB, acquired the intellectual property assets of Aleafia Health and subscribed for shares in the capital of each of Emblem Cannabis Corporation, Canabo Medical Corporation and Aleafia Retail Inc. (collectively the "Companies"). The Purchaser is now the sole shareholder of the Companies and their respective subsidiaries (the foregoing entities, except for Emblem Realty Ltd., which is a non-acquired subsidiary of Emblem Cannabis Corporation, being the Aleafia Purchased Entities).

Certain excluded assets and liabilities of the Aleafia Purchased Entities were transferred to a subsidiary of Aleafia Health that is not included among the Aleafia Purchased Entities, and all previously issued and outstanding securities of the Companies (other than the purchased shares) were canceled without consideration.

RWB is a multi-state cannabis operator and house of premium brands in the US legal cannabis sector, the Canadian cannabis market and certain international jurisdictions. RWB is predominantly focusing its investments on major US markets as well as Canadian and International markets by virtue of its acquisition of the Aleafia group of companies.

Gowling WLG advised RWB with respect to this transaction with a team led by Jason A. Saltzman and included Virginie Gauthier and Kate Yurkovich (financial services and insolvency); Kathleen Ritchie, Josh Rosen, Joseph McDonald and Jaanam Mahboobani (corporate and securities); Ash Gupta, Paul Carenza, Michael Bussmann and Anita Yuk (tax); Kirsty Strong and Brian Parker (real estate); Jordan Epstein (employment); Charlotte McDonald (IP); and Alex Sadvari and William Bjornsson (cannabis regulatory).