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Cannabis Professional’s daily roundup of industry news. View archive here.

GTEC Holdings no longer wants to buy a Kelowna cultivation facility from Canopy Growth; the cannabis division of Breakthru will help distribute Auxly Group products; convenience store giant Couche-Tard will put more effort into selling cannabis products; and Alberta is returning its entire CannTrust product inventory back to the beleaguered producer.

– Jameson Berkow

GTEC terminates deal to buy Canopy Growth facility

Kelowna, British Columbia-based GTEC holdings is no longer interested in buying an asset in its own backyard from Canada’s largest legal cannabis grower.

In late July, GTEC agreed to pay Canopy Growth $13-million for an indoor cannabis cultivation facility. GTEC, which owns two licenced cannabis cultivation facilities in Alberta and Ontario, had previously planned to spend an additional $2-million finishing the unlicensed facility on Alcan Road, just 8 km from its own Dickson Avenue headquarters.

Late Wednesday evening, GTEC announced it had changed its mind. The company did not provide a reason for the decision, saying in a statement only that it “will not proceed with the completion of the transaction” and "GTEC is entitled to a refund of its $250,000 deposit.”

The deal value was relatively small, though Canopy’s position as the seller made it noteworthy. Under former co-CEO and co-founder Bruce Linton, Smiths Falls, Ontario-based Canopy was among the most acquisitive companies in the legal cannabis industry.

Canopy originally acquired the Kelowna facility as part of its $250-million deal to buy Tokyo Smoke parent company Hiku Brands in July 2018. It has never been licensed for cannabis production, though GTEC had previously expected to win Health Canada approval by early 2020.

– Jameson Berkow

Breakthru lands Auxly as new cannabis partner

Less than two months after Breakthru Beverage Group lost its exclusive partnership with CannTrust, the alcohol distribution giant has found a new cannabis partner.

Kindred Partners, a wholly-owned cannabis brokerage subsidiary of Breakthru, said Wednesday it would become the exclusive sales agent for products from Auxly Cannabis Group. The deal covers all four of Auxly’s in-house brands: Dosecann, Kolab, Robinsons and Foray.

The company “leverages the deep experience of its sister-company, Breakthru Beverage Canada, in working with Canadian Provincial control boards, licensed distributors and retailers to broker regulated cannabis products for the adult-use market,” Kindred explained in a release. “Kindred will provide its brokerage services to Auxly and use its national presence to market the company’s portfolio of brands nationwide.”

Breakthru established Kindred in the fall of 2018 specifically to act as the brokerage arm for CannTrust. The company also invested $9.2-million in CannTrust, buying 902,405 common shares at $10.23 per share.

CannTrust shares closed Wednesday at $1.72 on the Toronto Stock Exchange.

- Jameson Berkow

Couche-Tard aims to be ‘key player’ in cannabis retail

Alimentation Couche-Tard Inc. wants to be one of the “key players” in the North American cannabis market, the Quebec-based global convenience store chain’s founder said Wednesday.

Speaking after the company’s annual meeting in Montreal on Wednesday evening, founder and executive chairman Alain Bouchard lamented how the expertise to achieve that position will be developed outside the company’s home province.

“I think it’s a shame for Quebec because this expertise will go outside Quebec,” Mr. Bouchard told the Canadian Press. “When we deploy a network in the United States or any other activities in the U.S., it will come from outside Quebec.”

Couche-Tard made an investment in Edmonton-based cannabis retail chain Fire & Flower in late July that provides the option to acquire a controlling stake in the pot seller for a total of $380-million. The company also has a partnership with Canopy Growth focused on retail branding that has been in place since early 2019.

The parent company of Circle K has turned its sights to the United States, where recreational consumption of marijuana is legal in 13 states, CEO Brian Hannasch told CP, who added the retailer has long experience selling age-restricted products. But it must take the time to know the rules of the game, he added.

Couche-Tard has already started selling cannabidiol (CBD) products, a compound with potential medicinal qualities but without significant levels of THC — a compound in cannabis that produces a high — in some stores in the U.S. and Ireland.

“It’s kind of the Wild West, but I think we have a place in this market,” Mr. Hannasch said. “But this is only the beginning.”

- Jameson Berkow, with files from Canadian Press

Alberta returns all CannTrust inventory

Alberta is now the second Canadian province to return unsold CannTrust cannabis products to the producer.

Roughly $1.3-million worth of dried cannabis flower and prerolls will be returned, CannTrust said in a brief statement early Thursday morning. The Alberta Gaming, Liquor and Cannabis Commission (the “AGLC”), the crown corporation responsible for wholesaling of cannabis in the province, can return goods to CannTrust for any reason, the company said, adding the returned products “constitute all or substantially all” of Alberta’s inventory of CannTrust products.

“The AGLC operates independently of Health Canada [and] Health Canada has not ordered a recall in respect of any of the Company’s products,” CannTrust said.

The return comes exactly one month after Ontario returned all of its own CannTrust inventory back to the company, which at the time was valued at roughly $2.9-million. Health Canada suspended CannTrust’s licence earlier this week and several analysts have subsequently raised doubts about the future of the company.

- Jameson Berkow

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