Origin House Management Defends Against Hostile Takeover Bids

Origin House

Just as the past few months have seen a flurry of mergers and acquisitions as cannabis companies seek to expand through these consolidations, the new year is likely to see this trend continue. As such, shareholders are often tempted by lucrative offers in these hostile takeover attempts, much to the disapproval of existing management.

One such company is Origin House (CSE: OH)(OTCQX: ORHOF), a Canadian-based marijuana product and brand company, which has seen itself the recipient of a number of these offers. Today the company announced that around 26 percent of shareholders have entered into voluntary voting support agreements with the company, aligning themselves against future takeover attempts.

For the past few months, several public cannabis companies have approached Origin House with stock-based offers to shareholders. In response, these support agreements, prepared after going through legal and strategic counsels, represent an effort from management to protect Origin House from short-term motivated offers.

There is a growing trend within the cannabis sector of hostile consolidation transactions with companies using their stock as currency,” said Origin House CEO Marc Lustig. “We are seeking to protect the Company from opportunistic paper bids designed on taking advantage of shareholders by offering short-term gain while depriving them of the more significant potential long-term value that we are building.”

M&A activity became especially prevalent after Canada legalized recreational marijuana in mid-October. Since then, major takeover bids such as Green Growth Brands Ltd and Aphria have captured the markets attention, despite spurned advances from the latter (a transaction that’s worth $2.8 billion). At the same time, Aleafia Health Inc announced a $173 million acquisition of Emblem Corp.

Our company has a unique business model, when compared with other companies in the industry,” said President and General Counsel Afzal Hasan. “Our brand-focused strategy has already show strong results in the few quarters it has operated. But it is still in early stages, and we are targeting substantial value creation over the long-term through our ability to expand globally with a low-cost scalable model…The group of shareholders who voluntarily enter into these agreements are committed to the long-term value of Origin House.”

Origin House, with a market capitalization of $416 million, distributes over 130 brands mainly in California, but also operates a number of stores in Ontario, Canada as well. Today’s trading session saw shares surge around 11 percent.

Origin House Company Profile

Origin House is a growing cannabis products and brands company operating across key markets in the U.S. and Canada, with a strategic focus on becoming a preeminent global house of cannabis brands. The Company’s foundation is in California, the world’s largest regulated cannabis market, where it delivers over 130 branded cannabis products to the majority of licensed dispensaries.

Origin House’s brand development platform is operated out of five licensed facilities located across California, and provides distribution, manufacturing, cultivation and marketing services for its brand partners. The Company is actively developing infrastructure to support the proliferation of its brands internationally, initially through its acquisition of Canadian retailer 180 Smoke. Origin House’s shares trade on the Canadian Securities Exchange (CSE) under the symbol “OH” and on the OTCQX under the symbol “ORHOF”. Origin House is the registered business name of CannaRoyalty Corp. –Origin House