Subversive completion of qualifying transaction with InterCure

Industry: Real estate not elsewhere classified

Subversive Real Estate Acquisition REIT LP, a special purpose acquisition company, completed a qualifying transaction valued at US$50 million to combine with InterCure Ltd. (doing business as Canndoc), an Israel-based cannabis company.

Subversive is the first SPAC in the world to be structured as a limited partnership. It is listed on the NEO Stock Exchange and will shortly be listed on the Toronto Stock Exchange. This is the first cannabis REIT SPAC in the world.

Intercure Ltd. is the largest cannabis company in Israel. It is listed on the Tel Aviv Stock Exchange (TASE). Intercure’s stock price rose by over 40 per cent on the announcement of this transaction.

Canndoc, a wholly-owned subsidiary of InterCure Ltd., is Israel’s largest licensed cannabis producer and one of the first to offer Good Manufacturing Practices (GMP) certified and pharmaceutical-grade medical cannabis products in pharmacies across the country. Canndoc seeks to be well-positioned to capitalize on the adult-use market in Israel, which is expected to be legalized in 2021 or 2022.

Following closing, the combined entity will be listed on the TASE, the TSX and the NASDAQ. This will be the first company in the world to be listed on all these exchanges. This transaction will be Subversive’s “qualifying transaction” and will be the first such transaction in the world to comprise a merger of two public companies involving four stock exchanges in three jurisdictions.

The deal value is approximately $750 million, comprising the value of the merger parties plus PIPE.

The transaction involves numerous complex aspects, including:

  • The merger’s rare structure, which involves the acquisition by the target (Intercure) of the SPAC (Subversive)
  • A court-approved Plan of Arrangement process in Canada
  • Shareholder meetings of Subversive and Intercure in Canada and Israel, respectively
  • Prospectus filings in Canada and in the U.S.
  • Cross-border tax and corporate, commercial and securities law structuring
  • Concurrent PIPE financing with institutional investors
  • Approvals from several regulatory agencies in Canada, the U.S. and Israel

Goodmans LLP has acted for Subversive in connection with the $200 million initial public offering, the merger with Intercure, the design and formation of the SPAC, and in the planning, structuring, negotiation and execution of this multidimensional cross-border transaction with a team led by
Stephen Pincus,
and which included
David Coll-Black,
Jon Northup,
Bill Gorman,
Michael Royal,
Francy Kussner,
Ledya Yohannes,
Tara Hunt,
Hari Marcovici.

Blake, Cassels & Graydon LLP acted as counsel to the underwriters in the IPO with a team led by
Jeff Glass,
and which included
Norbert Knutel,
Alex MacMillan,
Liz Litwack-Lansberg,
Katherine Jones (securities),
Peter Lee (tax).

Paul Hastings LLP acted as U.S. counsel to Subversive.

Balter, Guth, Aloni, Ne'eman, Keynan, Granot acted as Israeli counsel to Subversive.

DTKG&G Co. acted as Israeli legal counsel to Intercure Ltd.


David Coll-Black Stephen N. Pincus Jon Northup Bill Gorman Michael Royal Francy Kussner Jeff Glass Norbert Knutel Peter Lee