Medical marijuana company IM Cannabis Corp. has signed a nonbinding agreement to acquire a controlling stake in a Polish company involved in distributing and potentially manufacturing tactical unmanned aircraft systems.
IM Cannabis announced Wednesday that it signed a letter of intent to acquire 51% of Space Defense Innovations LLC (SDI), a Polish company operating in the unmanned aerial systems sector through its wholly owned subsidiary BlueAero Group.
SDI is currently a reseller of tactical aircraft systems produced by BlueBird Aero Systems and, subject to receiving necessary regulatory licenses, is expected to become a European manufacturer of the company’s systems with exclusive rights in Poland.
The products include vertical takeoff and landing aircraft used for intelligence, surveillance and reconnaissance, hybrid fixed-wing systems, three-dimensional mapping technology and loitering munitions.
The proposed transaction represents another move by IM Cannabis outside its traditional marijuana business. The company currently operates a medical marijuana platform serving patients in Israel and Germany, although it has a pending transaction to sell its German operations and expects to retain its Israeli medical marijuana business.
Under the letter of intent, IM Cannabis would acquire 51% of SDI through a combination of common shares and/or pre-funded warrants, along with a 24-month seller loan carrying 9% annual interest.
IM Cannabis would also receive a five-year option to acquire the remaining 49% of SDI at the same valuation and would gain the right to appoint a majority of the company’s board.
As part of the proposed transaction, IM Cannabis would provide SDI with a line of credit of up to €2.3 million, or approximately $2.7 million, at closing. The credit line would have a 36-month maturity and could be converted into SDI shares at IM Cannabis’ discretion, subject to valuation requirements.
The companies said they expect to negotiate definitive agreements within 60 days. The agreement remains subject to due diligence, regulatory and corporate approvals, the assignment of certain commercial agreements and other closing conditions. IM Cannabis cautioned that there is no guarantee a definitive agreement will be reached or that the acquisition will be completed.
The move follows another proposed expansion into defense technology announced by IM Cannabis earlier this year. In March, the company signed a separate nonbinding agreement to acquire 51% of Polish technology company Blackaxe Technologies, which specializes in counter-drone systems, satellite intelligence, imagery and artificial intelligence analytics.
IM Cannabis trades on the Nasdaq Capital Market under the ticker IMCC.
