October 18, 2018

Sira Naturals to be acquired by Canadian cannabis investment firm

Photo | Matt Wright
Sira Naturals CEO Michael Dundas inspects a plant in the company's Milford grow room.

Milford-based Sira Naturals and four other U.S. companies are being acquired by a Canadian cannabis acquisition firm.

Sira Naturals and the other companies with operations in Nevada and Colorado will create an "anchor portfolio" for Cannabis Strategies Acquisition Corp. (CSAC), a Toronto-based special purpose acquisition corporation that went public last December.

Sira joins Nevada firms Washoe Wellness, The Canopy NV, LivFree Wellness and CannaPunch of Nevada in joining the Canadian public weed market.

In total, CSAC is paying $76 million in U.S. money to acquire the five firms and is issuing about 7.6 million Class B shares and $43.7 million in promissory notes.

The announcement did not indicate when the transaction would close.

Sira could be the most profitable business acquired by CSAC, as its target revenue for 2019 is about $90 million, more than double the target revenue for the second-highest projected earner of the group.

In total, CSAC is expecting revenues of at least $383 million from the businesses in 2019.

In its press release, CSAC called Sira a "best-in-class operator" in Massachusetts. The transaction was announced on the same day that cannabis became legal for recreational sales and use in Canada.

Sira was the first Massachusetts company to be awarded an adult-use cultivation license and also holds provisional licenses for the manufacturing and transportation of goods. The company is also seeking recreational retail licenses for dispensaries at its currently-medical-only sites in Cambridge, Somerville and Needham.

Sira Naturals CEO Michael Dundas deferred comment to CSAC CEO Jonathan Sandelman. He could not immediately be reached for comment.

According to CSAC, Sandelman is a 30-year veteran of banking and finance and was formerly the President of Bank of America Securities and CEO of Sandelman Partners.


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