In our last review of Invictus MD Strategies Corp (OTCMKTS:IVITF)(CNSX:IMH), we mentioned a bought deal private placement offering of convertible debentures with aggregate gross proceeds of $40 million that the Company originally announced on April 20, 2017 and was in the process of closing. On May 8, 2017, the Company announced that it determined not to proceed with its previously announced offering, and instead will proceed with an offering of units with the same underwriting syndicate. Invictus MD’s board of directors determined that completing an equity financing on the terms of the offering aligns better with the Company’s strategic objectives than the previously announced convertible debenture financing.
The new bought deal private placement will be for an aggregate gross proceeds amount of $20 million. Instead of convertible debentures, the Company will issue units comprised of one common share of the Company, and one half of one common share purchase warrant (each whole common share purchase warrant, a “Warrant”). Each Warrant will be exercisable to acquire one common share for a period of 18 months following the closing date of the Offering at an exercise price of $1.75 per Warrant Share. Canaccord Genuity Corp. and Eventus Capital Corp., as co-lead underwriters and joint-bookrunners, on behalf of a syndicate of underwriters have agreed to purchase, 14,820,000 units at a price of $1.35 per Unit. Closing of the Offering is expected to occur on or about May 24, 2017
For those who are not familiar with Invictus MD Strategies Corp., it is focused on three main verticals within the burgeoning Canadian cannabis sector: Licensed Producers under the Access to Cannabis for Medical Purposes Regulations (ACMPR) located in both Alberta and Ontario, including Acreage Pharms Ltd. and AB Laboratories Inc.; fertilizer and nutrients through Future Harvest Development Ltd.; and Cannabis Data and Delivery, with its wholly owned subsidiary Poda Technologies Ltd.
Invictus MD targets small and mid-size companies with proven brands, strong customer focus, and significant growth potential. Invictus directs the strategy towards profitability and growth for each of their portfolio companies. They assist the companies with business process integration and by structuring and deploying proper capital to support sustained growth.
In other news, Invictus MD announced on April 26, 2017 that it has acquired 100% of the shares of Acreage Pharms Ltd., a licensed producer of Cannabis under the Access to Cannabis for Medicinal Purposes Regulations (“ACMPR”). The Company also announce new appointments to the Company’s management team. Trevor Dixon was appointed director and Chief Executive Officer of the Company and Brenda Dixon was appointed the Chief Science Officer of the Company. Dan Kriznic continues his leadership role as Executive Chairman of the Company, and stated the following:
“This is an exciting day for Invictus MD, and our shareholders. With the Company’s acquisition of 100% of Licensed Producer Acreage Pharms in Alberta, we now have 250 acres of cultivation space that stretches from Alberta to Ontario. Acreage Pharms will benefit from a low cost of production as a result of low energy and water costs. Additionally the property is friendly to building as many square feet as required based on the significant demand.”
According to Deloitte, the Canadian cannabis industry has the potential to grow to as much as $22.6 billion over the upcoming years, of which the retail market is estimated to be worth up to $8.7 billion. At present, there are only 43 cannabis producers licensed by Health Canada. This, along with the expected uptick in demand that will inevitably result from Canada’s legalization of recreational use of cannabis, presents a significant market opportunity for Invictus MD to capitalize on.
IVITF stock has retreated from its resistance level of US$1.58 that it has traded up to on two separate occasions, on February 9th, and April 19th of this year. The stock is currently trading at US$1.07, near the lower part of the range it’s been trading in since November of 2016. With the expected spike in demand for cannabis resulting from its legalization of recreational use, which is expected to take effect in July of 2017, the current price dip may be a good entry point. The legalization of recreational cannabis can only result in an upward price move for IVITF, or any other cannabis related stock. Current market capitalization stands at US$62.82 million, on 10.64 million shares outstanding as of May 17, 2017. We will be updating our subscribers as soon as we know more. For the latest updates on IVITF, sign up below!
Disclosure: We have no position in IVITF and have not been compensated for this article.