Canada is set to make history this week by tabling legislation that would make the nation the first G-7 country to legalize recreational cannabis.
This development has captured the attention of the market and many investors are focusing on companies levered to this opportunity. We want to highlight two Canadian companies that investors should be monitoring closely.
OrganiGram Announces LOI with Trauma Healing Centers
Organigram Holdings (OGI.V) (OGRMF), a licensed medical cannabis producer in Canada announced that it entered a letter of intent to acquire all the issued and outstanding shares of Trauma Healing Centers Incorporated. Under the terms of the LOI, Organigram will issue 719,425 common shares at $2.78 per share to the company.
Trauma Healing Centers currently services over 3,500 patients across 7 Canadian locations and it has plans to open 7 more locations. The company specializes in medical cannabis assessment and prescribing. Trauma sees patients on a referral basis and offers a multi-disciplinary approach to healing chronic conditions.
Trauma Healing Centers will continue to operate independently by providing referrals based on client need to any licensed producer in Canada. The company is the only organization to have a multi-disciplinary designation with Blue Cross for military and RCMP veteran clients.
We favorable on this development due to the potential synergies between the two companies. Also, the $2 million purchase price is attractive when compared to similar transactions. OrganiGram has rallied off its recent lows and this is a company that should be on every investor’s radar.
Canabo Announces Groundbreaking Results
On Friday, Canabo Medical (CMM.V: TSX Venture) (CAMDF: OTCQB) released the results of an observational study that connected doctor-supervised medical cannabis treatments to a decrease in benzodiazepine reliance among Canadian patients.
Research conducted over the past year revealed that 40% of patients who were prescribed medical cannabis to treat pain and anxiety eliminated the use of benzodiazepines within 90 days. The number of patients that stopped using benzodiazepines increased to 45% within a year of cannabis treatment.