Author: TSX Stocks

Organigram Holdings Inc. (NASDAQ: OGI) (TSX: OGI) is buying Motif Labs Ltd. in a deal valued at C$90 million consisting of C$50 million in cash and C$40 million of Organigram common shares priced at C$2.3210 on the Toronto Stock Exchange. The stock was popping over 8% on the news and lately selling at $1.58 (C$2.83) on the NASDAQ.

In addition, Motif shareholders will receive an additional consideration of $10 million payable in Organigram common shares if the shares reach a price per share exceeding $3.2203 per share within 12 months of the date of the transaction.

Organigram said the deal will be a financially accretive acquisition with Motif generating approximately C$86 million of LTM net revenue and adjusted EBITDA of C$4.7 million. There will also be a significant cost synergy potential estimated to be more than C$10 million to be realized over ~24 months.

The deal will also help Organigram as it pursues the legal hemp market. Motif produces THCA, a highly sought-after ingredient in the production of the fast-growing infused pre-roll market.

Motif is a Canadian leader in the vape and infused pre-roll categories backed by a portfolio of strong, owned brands, including the popular BOXHOT brand. Motif’s business also includes a wholesale division and end-to-end services for external brands. The deal propels Organigram into the number one market share position in the Canadian adult-use market. It will also place Organigram into the number one position in the vape category and accelerate the company’s market share in the fast-growing infused pre-roll segment.

“The highly complementary acquisition of Motif establishes Organigram as Canada’s largest cannabis company by market share and accelerates our vision to be a leading cannabis company across all major categories, driven by a relentless focus on the consumer of today and tomorrow,” said Beena Goldenberg, CEO of Organigram. “Winning in Canada, the world’s largest federally legal recreational market, supported by leading brands and best-in-class operations, innovation and product development, provides the platform to unlock global opportunities as evolving attitudes towards cannabis drive regulatory changes in new and exciting markets,” she added.

“Motif was founded in 2017 with a vision to leverage manufacturing expertise to succeed in the production of cannabis extracts. We are proud to say that today, not only is Motif one of Canada’s largest and most efficient extractors but we have also commercialized a portfolio of leading, widely distributed brands that have unlocked leading market share positions of #1 in vapes and #3 in infused pre-rolls,” said Mario Naric, CEO and Founder of Motif. “This is a landmark transaction in our industry and the Motif team is thrilled to be joining forces with Organigram to create Canada’s undisputed leader with deep capabilities in all major cannabis categories.”

The acquisition also adds two strategic facilities to Organigram’s manufacturing and cultivation footprints across Canada. According to the statement, Motif’s Aylmer, Ontario facility provides advanced CO2 and hydrocarbon extraction capabilities in addition to increased infused pre-roll production. The facility adds monthly production of 1,350 kgs of distillate, 400 kgs of high value hydrocarbon extracts, 750k infused pre-rolls capacity, and 1 million units of vape filling capacity. The London, Ontario facility provides Organigram with a strategic location in Southwestern Ontario that will be used as a distribution hub to optimize fulfillment and shipping costs.

Organigram recently reported earnings as Green Market Report wrote that the company posted net revenue of C$41.1 million for the quarter, up 25% from C$32.8 million a year earlier. That eclipsed the average analyst estimate of C$39.12 million (US$28.56 million), based on Yahoo Finance data and June 30 exchange rates. Net income was C$2.8 million, versus a net loss of $27.1 million in the previous quarter and a net loss of C$213.5 million in the same period last year.

Photo: Mike Biden

The owner of a Kelowna distillery says the company will continue to operate despite a court-ordered sale of the property.

Forbidden Spirits has been selling its liquor and providing tastings out of its Wallace Hill Road location in Southeast Kelowna since 2019, four and a half years after founder Blair Wilson first started the company.

Wilson, a former Member of Parliament, moved his family to the property in the summer of 2010 from the Lower Mainland, and soon began turning the apples grown on his orchard into vodka and other liquors.

But earlier this month, the 20-acre property was foreclosed on and listed as a court-ordered sale for $4.89 million. The property includes an 8,500 square-foot house, a 3.5-acre apple orchard, the 10-stall Apple Orchard RV park, equestrian facilities, and the Forbidden Spirits tasting room and production facility.

Owing more than $1 million

According to court documents, Blair Wilson and his wife Kelly Wilson took out a private equitable mortgage on their property with Instafund Mortgage Management Company in the amount of $1 million in June 2023.

Photo: Castanet

But according to the filings, the Wilsons have not made the payments on the mortgage and have now defaulted, owing more than $1.08 million as of May 1, 2024. As such, the courts ordered the property be sold.

Wilson said they went through “some struggles” during the COVID-19 pandemic and they’ve seen sales out of their tasting room decrease since the changes in Kelowna’s Airbnb rules.

But while they’ve been forced to sell their property, Wilson says “things have gotten a lot better since COVID and Forbidden Spirits “will live on and will continue to grow in the future.”

“Luckily we’ve got multi sources of income streams, from online sales which has increased significantly for us, to people seeing our products at farmers’ markets and special events, and as well in the private liquor stores here in B.C.,” he said.

Nicole Eastman, a real estate agent who’s selling the Wilsons’ property, said the court has ordered a “vacant possession” for the sale, which would suggest the distillery be required to find a new home once a sale goes through. But Wilson is optimistic the business will be able to stay put.

“I’m hopeful that we’ll be able to continue to run Forbidden Spirits out of the same location that we’ve been doing for last number of years, but if that’s not in the cards, then I’m amicable to be looking around for other locations that may suit us … we’ll cross that bridge when we come to it,” he said.

“A lot of the people I’ve talked to who’ve come to take a look at it are interested in having us continue to operate Forbidden Spirits in that location. We’ve been there for a while and people know where we are which is great. Southeast Kelowna has been a great place for us to live for the past 12 years, we’ve enjoyed it immensely.”

‘Cease trade order’

Forbidden Spirits is a publicly traded company, a somewhat unique situation for a small distillery, but they’ve been barred from trading stocks on the Toronto Stock Exchange. The BC Securities Commission issued a “cease trade order” for Forbidden Spirits stocks back on May 8, 2023, for failing to file financial disclosure documents.

“We had a bit of a cash flow issue at that point in time and the cost of having an audit was significantly higher than we had initially anticipated,” Wilson said.

This past July, the BC Securities Commission partially revoked the cease trade order and last week and the company announced it had completed the “first tranche” of a private placement, from 13 private investors.

“We just raised $305,000 to be able to be able to pay the auditors and the accountants and the lawyers to facilitate the completion of the documentation such that the Toronto Stock Exchange can get us back up and trading on the venture exchange,” he said.

Wilson added they’ll be completing the required audit and paperwork over the next couple months, and anticipates Forbidden Spirits, under the ticker symbol VDKA, will be back up and trading on the TSX by late January or mid-February.

“The company intends to use the net proceeds from the private placement to prepare and file outstanding financial statements and continuous disclosure records, pay outstanding related fees and penalties, meet certain financial obligations, and continue operations until it can apply for and receive a full revocation of the [Failure to File Cease Trade Order],” the company’s press release states.

This isn’t the first time the company has raised funds through a private placement. Back in 2021, it raised $3.6 million through a private placement with Spartan Acquisition Corp., which led to them being listed on the Toronto Stock Exchange.

Sued over unpaid loans

Lawsuits filed in Small Claims Court in November 2023 by Cassis Developments Inc. said the company loaned Forbidden Spirits and the Wilsons two separate loans of $59,500, one on Nov. 5, 2021, and one on May 30, 2022.

“The defendant has made various excuses over the last 15 months, claiming that he had a new loan coming, that he’s selling his house etc. but he never came through,” the lawsuits state.

“Meanwhile, the defendants paid $20,000 to take their grown daughter, their son-in-law and their 2 grandkids on a Mexico vacation with them in December 2022. This was after the loan was due and he claimed he didn’t have the money.”

The suit goes on to say that Blair Wilson partially repaid the loans, but after agreeing to instalment payments in August 2023, his post-dated cheques were returned as “non-sufficient funds.”

Judges have recently ordered Wilson pay back the remaining balance on the loans, at a rate of no less than $2,000 per month on one and $3,500 per month on the other.

Cassis also sued the Wilsons and Forbidden Spirits over the $6,900 purchase of a 200-litre barrel of whiskey in 2021. The lawsuit said the Wilsons had “repeatedly failed to provide evidence that the barrel exists in storage,” despite it coming to maturity in January 2024. A judge ordered Forbidden Spirits pay Cassis $8,500 by Oct. 15 of this year.

Wilson tells Castanet the issue dates back to his company’s “cash-flow issues” from a couple years ago, but the matters have now been resolved

“Two out of the three have actually been paid off and we’ve moved on,” Wilson said.

Former Member of Parliament

Blair Wilson served as the MP for West Vancouver—Sunshine Coast—Sea to Sky Country from 2006 to 2008. He was the subject of a series of stories in The Province newspaper in 2007 alleging his 2006 victory was aided by unlawful spending. Wilson resigned from the Liberal caucus amid the allegations.

While Elections Canada later cleared Wilson of 21 of the 24 allegations of improper campaign financing, he was not permitted to rejoin the Liberal Party and he ran unsuccessfully for the Green Party of Canada in 2008.

Wilson sued The Province over the articles, and while he was initially awarded $125,000 for defamation over a single claim in one of the articles, the BC Court of Appeal later overturned the decision.

By Fadimata Kontao, Portia Crowe and David Lewis

BAMAKO (Reuters) -Mali, one of Africa’s biggest gold producers, has issued an arrest warrant for Barrick Gold Chief Executive Mark Bristow, a warrant document seen on Thursday by Reuters showed, escalating a dispute with the Canadian mining company.

The West African country’s junta-led government is seeking more income from the sector to bolster state revenues as prices of the precious metal rally and has detained mining executives to put pressure on foreign companies operating there.

Four senior local employees of Barrick were briefly detained in September as the government demanded about $500 million in unpaid taxes, and then arrested again last month pending trial.

Bristow told Reuters in early November that the world’s No. 2 gold miner was confident of resolving claims and disputes with authorities before the end of the year.

He is accused of money laundering and violating financial regulations, the warrant document, first reported by Malian media and dated Dec. 4, showed. Its authenticity was confirmed by two sources close to the matter who asked not to be identified.

Barrick said the company “will not be commenting” on the reported arrest warrant, responding to a Reuters request. Barrick’s shares were down 2.9% on the Toronto stock exchange after the news.

Bristow, a South African national who shuttles between Britain and the United States, last travelled to Mali in July, according to the company website. Barrick has its headquarters in Toronto.

Another document showed Mali had also issued an arrest warrant for Cheick Abass Coulibaly, general manager at Barrick’s Loulo-Gounkoto mining complex in Mali.

Australia’s Resolute Mining also had its British CEO and two other employees detained by Mali’s military-led authorities over a tax dispute last month.

They were released after the miner agreed to pay $160 million.

The detentions and arrest warrants in Mali highlight the challenges faced by international mining companies in the region, where Burkina Faso and Niger have also increased pressure on them.

Burkina junta leader Ibrahim Traore said in October the country plans to withdraw mining permits from some foreign companies and will seek to produce more of its own gold.

Niger has taken control of French nuclear fuels company Orano’s Somair uranium mine, the company said on Wednesday.

The three countries have shifted away from traditional allies such as the United States and former colonial power France, and grown closer to Russia, which is helping provide security for their military leaders.

(Reporting by David Lewis, Fadimata Kontao, Portia Crowe; additional reporting by Divyia Rajagopal in Toronto; Writing by Anait MiridzhanianEditing by Bate Felix, Silvia Aloisi and Barbara Lewis)

Wagyu cattle on feed at Macquarie Downs

JAPANESE meat trading giant Starzen has made its first investment in the Australian cattle industry, purchasing the Macquarie Downs specialised Wagyu feedlot near Leyburn on Queensland’s Darling Downs.

Macquarie Downs is a substantial 6900ha property with a commercial feedlot with a capacity for 3900 head across 32 pens, plus a large irrigated and dryland cropping area for hay, silage and grain production.

The Macquarie Downs business has been owned since the yard was established in 1995 by the Suzuki family from Japan, whose primary business is in real estate development. Since both buyer and seller are Japanese in origin, it is considered unlikely that Foreign Investment Review Board approval will be necessary.

The separate, respected Macquarie Downs Wagyu genetics and cattle breeding business is not included in the sale, and will continue to be operated by the Suzuki family. Macquarie Downs-bred cattle currently occupy about three quarters of the feedyard capacity, custom-fed, with the remainder bred by others. Almost all of the internally-bred cattle are Fullbloods, with the remainder F1-Fullblood.

In an advice to the Tokyo Stock Exchange, the listed Starzen said it had bought the Macquarie Downs feedlot and farming business via Yorkrange Pty Ltd for A$55.9 million. The expected completion of the transaction is February 28, 2025.

Yorkrange will become a wholly-owned subsidiary of Starzen.

The acquisition was part of Starzen’s strategy to strengthen its overseas operations, particularly in the production and supply of Australian Wagyu beef, the company told the TSX.

“By managing cattle fattening operations directly, Starzen aims to improve beef quality and enhance its supply chain for markets in China and Southeast Asia,” it said.

The acquisition will allow Starzen to directly engage in the entire process of production of Australian Wagyu beef and in sales in other overseas markets, mainly in China and Southeast Asia.

Wagyu cattle on feed at Macquarie Downs

Formerly known as Zenchiku, Starzen has traded in Australian beef for decades, establishing the Starzen Australia division four years ago, both for importation of Japanese Wagyu beef to this country, as well as export. The company for many years was one of the largest suppliers of grinding beef for McDonald’s Japan.

In Japan, Starzen owns and operates extensive Wagyu feedlot and processing assets, some of which have been visited on earlier Australian Wagyu Association study tours to Japan. The company also imports and distributes large quantities of beef from Australia, the United States and New Zealand. Starzen employs almost 2800 staff across its operations.

In addition to the modern, well-equipped feedlot, the 6900ha Macquarie Downs holding includes 1300ha of annual fodder cropping, 500ha of irrigated cropping (wheat, barley and hay in winter and sorghum, soybean, mung bean, maize and cotton in summer), 3500 megalitres of irrigation water from seasonal overland flow and 577 megalitres of underground water allocations.

Irrigation is provided through lateral move and hybrid centre pivots, allowing exact applications of water to maximise yields and watering efficiency.

Starzen has been indirectly connected with the Macquarie Downs feedlot for some time, via a third party which was custom-feeding Wagyu at the site, and on-selling to Starzen.

Starzen rose to prominence earlier this year when its entry in the 2024 AWA Branded Beef Competition won the Purebred Wagyu class

Since 2020 Starzen Australia has developed and launched two Australian Wagyu beef brands: Eight Blossom Beef, which won this year’s competition, and Imperial Blossom Beef, a single-origin Wagyu program.

“We are still at the very early stage of what we hope to pursue, creating Australian Wagyu brands as Japanese in Australia,” Starzen director Hirotsugu Shimbayashi said at the time.

BAMAKO – Mali, one of Africa’s biggest gold producers, has issued an arrest warrant for Barrick Gold CEO Mark Bristow, a warrant document seen on Thursday by Reuters showed, escalating a dispute with the Canadian mining company.

The West African country’s junta-led government is seeking more income from the sector to bolster state revenues as prices of the precious metal rally and has detained mining executives to put pressure on foreign companies operating there.

Four senior local employees of Barrick were briefly detained in September as the government demanded about $500-million in unpaid taxes, and then arrested again last month pending trial.

Bristow told Reuters in early November that the world’s No. 2 gold miner was confident of resolving claims and disputes with authorities before the end of the year.

He is accused of money laundering and violating financial regulations, the warrant document, first reported by Malian media and dated December 4, showed. Its authenticity was confirmed by two sources close to the matter who asked not to be identified.

Barrick said the company “will not be commenting” on the reported arrest warrant, responding to a Reuters request. Barrick’s shares were down 2.9% on the Toronto stock exchange after the news.

Bristow, a South African national who shuttles between Britain and the US, last travelled to Mali in July, according to the company website. Barrick has its headquarters in Toronto.

Another document showed Mali had also issued an arrest warrant for Cheick Abass Coulibaly, general manager at Barrick’s Loulo-Gounkoto mining complex in Mali.

Australia’s Resolute Mining also had its British CEO and two other employees detained by Mali’s military-led authorities over a tax dispute last month.

They were released after the miner agreed to pay $160-million.

The detentions and arrest warrants in Mali highlight the challenges faced by international mining companies in the region, where Burkina Faso and Niger have also increased pressure on them.

Burkina junta leader Ibrahim Traore said in October the country plans to withdraw mining permits from some foreign companies and will seek to produce more of its own gold.

Niger has taken control of French nuclear fuels company Orano’s Somair uranium mine, the company said on Wednesday.

The three countries have shifted away from traditional allies such as the United States and former colonial power France, and grown closer to Russia, which is helping provide security for their military leaders.

Photo: The Canadian Press

Bank towers are shown from Bay Street in Toronto’s financial district, on Wednesday, June 16, 2010.

Concerns about looming credit losses appear to have peaked at two of Canada’s largest lenders, but Bank of Montreal BMO-T is paying a heavy price for a ballooning watchlist of bad loans, while the pressure is easing and profit is rising at Canadian Imperial Bank of Commerce CM-T.

Leaders at both banks said Thursday they are hopeful that falling borrowing costs will create better conditions for clients in 2025, wrapping up a challenging fiscal year by reporting sharply contrasting fourth-quarter results.

BMO missed profit expectations by a wide margin in the three months that ended Oct. 31 as it added $1.52-billion in new provisions against loans that could default, which was far more than analysts expected. That wiped out any earnings growth from the bank’s Canadian and U.S. retail banking divisions.

Chief executive officer Darryl White said on a Thursday conference call that BMO’s credit performance “deteriorated more than we expected” in 2024. The bank has made changes to certain underwriting parameters, he said, and the level of provisions BMO needs to guard against future losses should start to “moderate” next year.

At CIBC, loan books held up better than analysts anticipated, mostly because the outlook improved for the bank’s U.S. commercial real estate portfolio, especially in the troubled office sector. Provisions for credit losses of $419-million were 23 per cent lower than last year.

CIBC sold off a portion of its U.S. office loans earlier this year and, in some cases, clients have paid down debt. Chief financial officer Robert Sedran said in an interview that he expects “a whole lot less noise” from commercial office loans next year.

CIBC’s revenue rose 13 per cent and its income from interest was up 17 per cent as profit margins on lending increased. The bank’s earnings per share rose by 24 per cent and comfortably beat analysts’ estimates.

“Looking ahead, we expect mortgage growth and consumer discretionary spending to accelerate as lower interest rates spur client demand through 2025,” chief executive officer Victor Dodig said on a Thursday conference call.

CIBC’s share price rose 4.4 per cent to $93.54 on Thursday, while BMO’s shares climbed 4.2 per cent higher to $139.73 on the Toronto Stock Exchange.

At the core of BMO’s credit issues are a series of commercial loans the bank made in 2021, in the wake of the COVID-19 pandemic. Several of the most problematic loans were to new clients, and Mr. White said BMO held more of the risk on its balance sheet than it should have. “In hindsight, the client selection as a result of that wasn’t exactly ideal,” he said.

Chief risk officer Piyush Agarwal called the fourth quarter “a high point” for loan-loss provisions. BMO expects to continue adding to its reserves against loan losses over the coming quarters, but in smaller amounts. By the second half of 2025 and early 2026, BMO expects its provisions to decline to more typical levels.

For now, Mr. White said, commercial loans the bank made more recently are performing better, and BMO still has an appetite for commercial lending.

“You should see us move with the market,” he said. “We’re not trying to press ahead and grow at rates that far exceed the market, nor do we expect to give up any market share.”

BMO profit climbed 35 per cent to $2.3-billion – or $2.94 a share – from the same quarter last year. The bank benefited from the reversal of an $870-million legal provision after an appeal court ruled in BMO’s favour on a lawsuit stemming from a Ponzi scheme that used an account at a bank BMO acquired.

On an adjusted basis, BMO said it earned $1.90 a share, while analysts expected $2.38 a share.

CIBC’s leaders expect competition to ramp up in the mortgage market, where its 1-per-cent rate of growth trailed peers last fiscal year. Some analysts have speculated that a wave of mortgage renewals at higher interest rates over the next year could spark a price war among lenders.

But executives said they are consciously preserving profit margins by focusing on attracting and keeping clients who use more of the bank’s products and services.

“Where we can serve them well, we’re happy to compete aggressively for that business,” Mr. Sedran said in an interview. “In areas where it’s just a single–product customer that doesn’t have any need for more of a relationship and doesn’t want advice, we’re not going to be in a position where we are competing aggressively for that business.”

From the same quarter last year, CIBC’s profit rose 27 per cent to $1.88-billion in the fourth quarter, or $1.90 a share. Adjusted earnings per share of $1.91 beat analysts’ consensus estimate of $1.79 a share.

Each bank raised its quarterly dividend. CIBC increased its payout by 8 per cent to 97 cents, and BMO announced a 5-per-cent hike to $1.59.