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“There has never been an offering like this to Canadian investors. We’re long on cannabis and we want to be able to take larger positions in companies in the space that are looking for funds,” said David Lubotta, a Partner at Merida who will run the Toronto office.

Lubotta has advised on various M&A transactions in the cannabis sector, and was a founding board member of Xanthic Biopharma Inc, which was purchased by Green Growth Brands, the American cannabis retailer that has launched a hostile bid for Aphria Inc.

But the location of the new office does not necessarily mean that the company will invest more heavily in the Canadian cannabis industry, according to Lubotta, especially when it comes to cultivation.

We’re long on cannabis and we want to be able to take larger positions in companies in the space that are looking for funds David Lubotta

“When you have the U.S. and South America and Europe coming on board, it’s going to be tough for the Canadians to compete with them on production. This is just like our wine industry in Niagara-on-the-Lake. They’re okay, but they struggle to compete with say, Napa Valley,” Lubotta said.

Because of its foundational roots in the U.S., where cannabis is still illegal at a federal level, Merida’s investments so far have been in businesses related to cannabis and the supply chain but that for the most part do not touch the plant. The private equity firm’s portfolio includes pot data and research company New Frontier Data; CB2 insights, which provides software to the medical cannabis space; and Emerald Scientific, a testing and extraction company, amongst many others.