Cronos Group’s Investment in PharmaCann

Fox Rothschild LLP advised PharmaCann on the deal.

Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) and PharmaCann Inc. (“PharmaCann”), one of the largest vertically integrated cannabis companies in the United States (“U.S.”), announced that they have entered into an agreement under which a wholly owned subsidiary of Cronos Group has purchased an option (the “Option”) to acquire an approximately 10.5% ownership stake in PharmaCann on a fully-diluted basis. The Option exercise will be based upon various factors, including the status of U.S. federal cannabis legalization, as well as regulatory approvals, including in the states where PharmaCann operates that may be required upon exercise.

PharmaCann has a broad geographic footprint in the U.S. and has built an efficient, effective and scalable operating model, including six production facilities and 23 dispensaries operating under the Verilife™ brand across six limited license states: New York, Illinois, Ohio, Maryland, Pennsylvania and Massachusetts. PharmaCann continues to invest in its manufacturing infrastructure and brand development to capitalize on the significant consumer retail and business-to-business wholesale opportunities.

Under the terms of the Transaction, total consideration paid by Cronos Group for the Option was approximately $110.4 million, which was deposited by Cronos Group with a third-party paying agent to be distributed directly to PharmaCann shareholders. The Option is subject to certain anti-dilution and other adjustments.

Cowen served as financial advisor to the special committee of independent directors of Cronos Group and Sullivan & Cromwell LLP and McGuireWoods LLP served as legal advisors to Cronos Group. Perella Weinberg Partners LP served as financial advisor to Altria Group, Inc.

Canaccord Genuity Corp. served as financial advisor and Fox Rothschild LLP served as legal advisor to PharmaCann.

The Fox Rothschild LLP team was led by Joshua Horn (Picture) and included Matthew R. Kittay, Vincent A. Vietti, Maureen Monaghan, Peter F. Kelly, Andrew M. Halbert, Jesse Fishman and Anna V. Steele.



Involved fees earner: Jesse Fishman – Fox Rothschild LLP; Andrew Halbert – Fox Rothschild LLP; Joshua Horn – Fox Rothschild LLP; Peter Kelly – Fox Rothschild LLP; Matthew Kittay – Fox Rothschild LLP; Maureen Monaghan – Fox Rothschild LLP; Anna Steele – Fox Rothschild LLP; Vincent Vietti – Fox Rothschild LLP;

Law Firms: Fox Rothschild LLP;

Clients: PharmaCann;

Author: Martina Bellini