Willie Nelson’s marijuana brand to light up Toronto bourse, says insider
US firm LivWell Enlightened Health joins the rush to Canada to list pot product companies, and has a side deal to ensure perpetual distribution rights to Willie’s Reserve
Calgary — One of Colorado’s largest recreational pot companies is planning to take Willie Nelson’s marijuana brand to Canada and go public in Toronto, according to people familiar with the matter.
LivWell Enlightened Health is planning a series of deals that include taking over management of a Calgary-based cannabis firm and a reverse takeover of investment company Target Capital, said the people, who asked to not be identified because the matter is not public.
It is also changing its name to LivWell International and striking a side deal that will give it perpetual distribution rights in Canada to Willie’s Reserve, the US country singer’s namesake marijuana brand, they said. The transactions could be announced later on Monday.
LivWell is expected to have an enterprise value of about C$300m ($228m) after going public, they said. The Denver-based company has about 500 employees and generates about $80m in annual sales from marijuana growing, processing and retailing, according to its website.
The deals will bring one of the best-known American marijuana brands to Canada, while continuing a trend of US pot companies heading to Toronto to tap investor demand for weed stocks. With US law curbing its ability to expand globally, listing in Canada will give LivWell access to international markets.
The company already had a toehold in Canada through a stake in Calgary-based 51st Parallel. LivWell is taking over management of 51st, which is raising C$50m, completing the takeover of Target Capital, and buying a $20m stake in GCH, the owner of Nelson’s weed brands, the people said.
The GCH deal will give LivWell 12% of that company and a seat on its board, along with a first crack at Canadian rights to other brands GCH develops, the people said.
Cannex Capital Holdings, owner of the largest marijuana company in the US, listed its shares in Toronto in March. Chief operating officer Leo Gontmakher said at the time that it was "virtually impossible" to raise money in the US, where cannabis remains illegal at the federal level. Other publicly traded Canadian firms with US operations include Ottawa-based CannaRoyalty and Liberty Health Sciences of Toronto.
Recreational marijuana is set to become legal in Canada on October 17, opening a market that Bloomberg Intelligence analyst Kenneth Shea has estimated may exceed C$5bn in 2020.
Pot in edibles and beverages and for vaping will still be outlawed for up to a year after legalization as the government takes more time to address the risks of those products.
Nelson’s pot empire includes the Willie’s Reserve and Willie’s Remedy brands, which market flower, vape pens and edible marijuana products.
"I bought enough of it, so I feel like I should be able to sell some back," the 85-year-old singer said in a promotional video posted online.