Today Hiku (HIKU.C) announced that their shareholders voted in favour of Canopy’s acquisition of Hiku. This means that Hiku’s stock will cease trading starting this Friday. The required shareholder approval thresholds were met, with the Arrangement being approved by approximately 99.4% of the votes cast by Shareholders present in person or represented by proxy at the Meeting. Approximately 52.64% of the common shares of Hiku were represented in person or by proxy at the Meeting.

In July it was announced that Canopy (WEED.T) was acquiring Hiku. Hiku shareholders were to receive 0.046 of a Canopy share for 1 common share of Hiku, representing the equivalent of C$1.91 per Hiku Share and a premium of 33% based on the 20-day volume weighted average prices of the Canopy Shares and the Hiku Shares as of July 9, 2018, and a premium of approximately 21% based on the closing prices of the Canopy Shares.

Canopy’s acquisition led to the formal termination of Hiku & WeedMD’s (WMD.V) previously announced ‘transformational transaction‘ that would have merged the two companies.

It’s tough to blame Hiku for taking the better deal. Who wouldn’t take the opportunity to be in business with Canopy?  The offer is for stock in the world’s largest marijuana company, at an attractive premium. Hiku hasn’t sold a gram of weed yet, and their 40,000 square feet of planned cultivation space isn’t be something Canopy considers important as they have millions of square feet of their own already in place. It’s the unique brands and storefront location that they acquired in the Tokyo Smoke deal that Canopy is after.

“Hiku equals brands. Canopy is built on brands. So we combined them.”

– Canopy CEO Bruce Linton

WeedMD got more than just an apology. They will receive a $10M CAD termination fee, which is a decent chunk of change considering in Q1 of 2018 they generated a total of $1.1M CAD in revenue. The new WeedMD holds $58M CAD in cash, 25,620 sq/ft of completed grow space, and has plans to build out 390,000 total sq/ft of grow space. The company presently sells about between 50 kg and 60 kg of product per quarter. At yesterday’s $1.72 closing price, WeedMD has a $185M market cap.

After receiving $5 billion dollars from Constellation Brands, many investors believe that Canopy will be on an acquisition tear in the coming months or years. Canopy has said it wants to use the capital to build their asset list moving forward. One investment strategy that Canopy’s CEO Bruce Linton doesn’t want his investors to engage in is trying to chase the next possible Canopy acquisition. Linton said that strategy may not work and that he doesn’t want his shareholders to sell the stock in search of the next Hiku.