Licensed cannabis producers WeedMD and Starseed have joined forces in the medical cannabis market.
By the end of the year, WeedMD plans to acquire 55 percent of a new company shared with Starseed and the Labourers’ Pension Fund of Central and Eastern Canada (LAP). Additionally, LAP will make a $25 million investment directly into the Strathroy, Ontario cannabis producer.
“This acquisition allows WeedMD to increase its distribution capabilities, maximize margins and access growth capital through a strategic investor,” said WeedMD CEO, Keith Merker.
Known for low-cost, high-quality cannabis, WeedMD’s state-of-the-art greenhouse and outdoor crops grow weed for Canada’s medical and recreational markets. The Toronto company also has a multi-channeled distribution strategy.
WeedMD’s cannabis distribution strategy
- Selling directly to medical patients.
- Strategic relationships across the seniors’ market.
- Supply agreements with Shoppers Drug Mart.
- Contracts with six provincial distribution agencies.
Starseed brings exclusive distribution and patient channels to the table. Through an industry-first partnership with the Laborers’ International Union of North America (LiUNA), Starseed offers medical cannabis as a fully-covered drug benefit to 100,000 LiUNA members, including retirees and their respective dependents.
“At Starseed, we have focused on building a unique sales platform that largely mirrors the pharmacy distribution model,” said Starseed president, Angelo Tsebelis. “Coupled with WeedMD’s high-quality cultivation assets and processing capabilities, we are well-positioned for accelerated future growth.”
The board of directors for the joint venture will include four delegates from WeedMD and three from Starseed. Certain members of Starseed’s management will sit on the management team.