Takeover Bids in the Cannabis Industry
Authors
Cheryl V. Reicin
Frazer House
What should you do if your cannabis company is the target of a hostile bid? Below is an excerpt from the article:
Directors should obtain appropriate legal and financial advice regarding both the process to follow and the relative merits of the proposed transaction. In particular, the target board should seek financial advice on the value of the target and its expected value over the medium term if the company successfully executes its business plan.
The board will need this advice to assess the proposed transaction and any realistic alternatives. The current regulatory and other uncertainty regarding the cannabis industry (not only in Canada, but in the U.S. and globally) and the resulting volatility of stock prices will add complexity to the analysis.
Faced with a proposal, the board will also need to consider whether it is appropriate to enter into an exclusivity agreement with the acquirer to negotiate a deal, or maintain the status quo while assessing other value-enhancing alternatives.
In assessing other available alternatives, the board should consider whether or not to canvass the market. There is no legal obligation to do so and this will ultimately be a business judgment for the board.
Read the full article here.
Interested in more cannabis content? Our team has written extensively on the subject – click here.
To discuss these issues, please contact the author(s).
This publication is a general discussion of certain legal and related developments and should not be relied upon as legal advice. If you require legal advice, we would be pleased to discuss the issues in this publication with you, in the context of your particular circumstances.
For permission to republish this or any other publication, contact Richard Coombs.
© 2026 by Torys LLP.
All rights reserved.