EXCLUSIVE: A deal between Australian Natural Therapeutics Group (ANTG) and Vancouver-based Asterion to build one of the largest medicinal cannabis facilities in the world has collapsed, the Canadian business has revealed.
Asterion chairman and chief executive Stephen Van Deventer confirmed that a planned merger of the companies has fallen through by mutual consent and “for many reasons”.
The firms had planned to join forces to build a A$400 million facility in Toowoomba, Queensland producing more than 500,000kg of cannabis a year and creating 1,000 regional jobs.
But Van Deventer said both companies had now walked away.
“At this time both parties have decided not to proceed,” he told Cannabiz. “It was mutual for many reasons.”
Pressed to elaborate, Van Deventer said a non-disclosure agreement prevented him from doing so.
“I can say that the current capital markets for cannabis have been difficult for the last two years and so it’s hard for both companies to commit to certain items with [that] uncertainty,” he said.
But while the ANTG merger may be off, Van Deventer said Asterion was pursuing another deal in Australia which it “hopes to sign in the near future”.
He declined to reveal further details, but described it as an “acquisition”.
News of the partially binding merger between ANTG and Asterion attracted widespread interest when it was announced in April 2021, even drawing coverage from mainstream national news outlets.
ANTG chief executive Matt Cantelo heralded the agreement as a “golden opportunity” while Van Deventer said it fit with both companies “short and long-term strategies”.
“This provides early revenue for Asterion and scalability to ANTG,” he said at the time, adding that the companies shared the “same vision, priorities and mindset”.
But it became apparent during 2021 that little or no progress was being made.
At the beginning of December Van Deventer said Asterion remained committed to the merger, but admitted progress on finalising the deal, particularly relating to detailed financial matters, had been slower than hoped.
For its part, ANTG has said nothing of the merger since the deal was first announced almost 12 months ago and is understood to have got cold feet early on.
ANTG chief executive Matt Cantelo confirmed it had fallen through, but declined to comment further.
“It just died in the water,” he said.
Although described as a merger, it was always unclear how the deal would have been stitched together given ANTG is the larger of the two companies and already generating revenue.
The enormous capacity of the facility also raised eyebrows, with some observers likening it to the early days of the Canadian industry, when huge facilities became white elephants.
Despite the deal’s collapse, Van Deventer insisted Asterion still plans to “move ahead” with the Toowoomba facility.
“Because of Covid and travel restrictions and bad capital markets we have slowed the progress down,” he said. “It’s still moving ahead, just not at rapid speed.”
He added Asterion was still planning an initial public offering “after the acquisition” of its new Australian target.