Months after stepping off of the TSX to that of the CSE, The Green Organic Dutchman (CSE: TGOD) has finally found a target to acquire. However, despite looking for a US-based prospect, the company instead is acquiring a Canadian operator – something it would not have had to leave the big board to do.

The company this morning announced that it will be acquiring Galaxie Brands Corporation, an Ontario based operator whom reportedly has a joint venture in Canada with a US brand name. The firm is primarily focused on cannabis 2.0 products, including edibles.

The acquisition appears to make little sense in the context of the recent actions made by the company, with TGOD actually going as far as to promote the “increased scale and operating capabilities” that it will have following the transaction, including additional facility space of 26,000 – despite having just sold off its Valleyfield facility due to unneeded capacity.

In terms of products, TGOD’s total SKU count will jump from 157 to 215, while bringing Galaxie’s Cruuzy brand in house, while also reportedly benefitting from “improved regional distribution.”

The transaction will also see Olivier Dufourmantelle, current President of Galaxie, step on as President of US Operations, while Angus Footman, CEO of Galaxie, will become the Chairman of the Board. Both individuals formerly spent time at Canopy Growth Corp in its early days.

The transaction will see TGOD pay $21 million for the company, with consideration consisting of common shares of the company at $0.175 per share. A $15 million earn-out is also in place. In total, 120.0 million shares are to be issued initially to Galaxie, with a potential 85.7 million shares to be issued under the earnout arrangements.

The transaction is slated to close in two weeks time.

TGOD last traded at $0.16 on the CSE.

Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.