If weed companies were judged on their company growth over the last three months, few in the market would keep up with Dan Kriznic’s Invictus MD Strategies (IMH.C).
Zooming in from almost out of nowhere, certainly outside the mind of the market anyway, into a $12 million raise and an acquisition of a chunk of a licensed producer, IMH has shaken off the stigma most small 2014-era weed companies carry to show themselves as a genuine, dividend-paying, asset acquiring beast as 2016 closes.
Today, while many CEOs were off hanging mistletoe, Kriznic was closing a deal. Merry Christmas, shareholders.
Invictus is pleased to announce that it has signed the definitive agreement to acquire 33.33% of AB Laboratories Inc. (“AB Labs”), a Licensed Producer under the Access to Cannabis for Medical Purposes Regulations (“ACMPR”), and up to 33.33% of AB Ventures Inc. (“AB Ventures”), a newly incorporated company formed to develop a second licensed expansion facility.
Only 33.33%?
Why yes, that’s a Kriznic staple move.
When IMH bought into Future Harvest, a retail outfit supplying the home grower market, Kriznic came in for a small piece at a time, allowing the founders to be comfortable they weren’t getting into something too quickly, showing them the value of having his team at the wheel, streamlining operations to make the asset worth more than what he was paying, and ultimately taking more and more of a stake, for a better and better price, as everyone made money on the deal.That plan also allowed him to back out of several proposed deals previously when the market turned, without damaging his bank balance or brand.
IMH now holds the vast majority of the Future Harvest asset, and has since spun out one product line for a $4m+ price, some of which was paid back to shareholders as a dividend payment; a first in the weed space.
Under the terms of the agreement Invictus MD will acquire 33.33% of AB Labs, for consideration of CAD$5,000,000 in cash and 2.4 million common shares of Invictus MD on closing and CAD$2,000,000 in cash 90 days after closing. AB Labs is licensed for cultivation under the ACMPR and maintains a 16,000 square foot facility located in Hamilton, Ontario. Invictus MD will have the right of first refusal to arrange any initial public offering, reverse take-over or other going public transaction of AB Labs or AB Ventures following closing. Closing is expected to take place by December 29, 2016.
Translated: The owners of AB like the colour of Kriznic’s money, but they still have some work to do to get a sales license in order for one arm of their company, and a cultivation license for the other. So IMH has the first right of refusal to grab more when they do that, but is also only in for the minimum if they don’t. It’s a great money man deal; low buy-in, high upside.
IMH has the cash to do that deal in hand right now, with plenty more left over, and has shown it can handle the big raises when needed, given its recent move to snare $10m, which soon became $12m. I’m guessing the folks that had IMH at $0.35 going into October, or $0.75 a month after that are probably happy to contribute more with the stock price now at $1.33.
Equity.Guru readers, who were being told IMH was an arbitrage at $0.35, should also be placing Kriznic-shaped stars on the top of their Christmas trees.
The boss likes his new LP deal, but says it wasn’t the first one he came across.
“After meeting, discussing, and conducting our due diligence on over 5 Licensed Producers, we are pleased with our partnership with AB Labs and AB Ventures. When both parties met, we both knew that this would be a great fit immediately.”
Kriznic always seems to have four deals on the hook at once, so he’s not the sort of CEO you want to assume has no news coming. He’s like the Max Fischer (Rushmore reference) of corporate execs.
And if that’s not enough, Kriznic also served as CFO for a little outfit called Lithium-X, so 2016 has not been his worst year.
Ours either. Thanks, Dan.
— Chris Parry
FULL DISCLOSURE: Invictus MD Strategies is an Equity.Guru marketing client.
Click here for Braden Maccke’s recent ‘Second Set of Eyes’ analysis on IMH.