WeedMD, a producer and distributor of medical-grade cannabis, has announced the acquisition of Starseed Holdings, a company providing cannabis to patients with medical insurance.
The acquisition is valued at approximately $78 million, and Starseed’s strategic investor – the Labourers’ Pension Fund of Central and Eastern Canada – will make a concurrent $25 million equity investment directly into WeedMD.
Starseed recently launched a partnership with Canada’s largest construction union, the Laborers’ International Union of North America, to provide medical cannabis as a fully-covered drug benefit for its more than 100,000 members and retirees in addition to their respective dependents.
WeedMD press release states the transaction bolsters the its leadership position in the medical cannabis market through Starseed’s distribution and patient channels, provides important growth capital, and fortifies WeedMD’s balance sheet.
“We believe that there are three pillars to long-term success in the cannabis space: quality production, unique distribution, and a strong balance sheet,” said Keith Merker, CEO of WeedMD.
“This acquisition allows WeedMD to increase its distribution capabilities, maximize margins and access growth capital through a strategic investor.”
Angelo Tsebelis, president of Starseed, added: “At Starseed, we have focused on building a unique sales platform that largely mirrors the pharmacy distribution model.
“Simply put, by making cannabis a paid benefit we have removed many of the barriers to mass market uptake of medical cannabis.
“Coupled with WeedMD’s high-quality cultivation assets and processing capabilities, we are well-positioned for accelerated future growth.”