IM Cannabis Signs Definitive Deal to Sell German and European Assets to CEO’s Company

IM Cannabis has signed a definitive agreement to sell its German and wider European-focused business to a holding company owned by its own chief executive, the Toronto- and Glil Yam, Israel-based company announced August 17, 2026. The Nasdaq-listed medical cannabis operator expects the transaction to improve its shareholders’ equity by approximately C$3 million and to leave it focused solely on the Israeli market.

Under the share purchase agreement, dated August 16, 2026, IM Cannabis will sell all outstanding shares of subsidiary I.M.C. Holdings Ltd. to Slil.com Holding Ltd., a privately held Israeli entity beneficially owned and controlled by Oren Shuster, IM Cannabis’s CEO, a director, a securityholder and a debtholder. Before closing, IMC Holdings will spin out the group’s Israeli operations back to the parent; what remains, and what Shuster’s company is buying, is the equity in German medical cannabis distributor Adjupharm GmbH, biosynthesis venture Xinteza API Ltd. and Luxembourg-registered Shiran Societe Anonyme, along with a package of liabilities.

The consideration is not new money. Slil and an affiliate have already paid IM Cannabis C$3 million in aggregate advance payments, and Slil will additionally assume retained liabilities capped at C$9.4 million unless both sides agree to adjust the figure. No new securities of IMCC or IMC Holdings are being issued or exchanged as consideration in the deal; the IMC Holdings shares being sold are existing shares transferred to Slil.

How the Transaction Is Structured

Because the buyer is controlled by the CEO, the sale is a related-party transaction under Canada’s special-transaction rules, which would ordinarily require a formal independent valuation and a minority shareholder vote. IM Cannabis says it intends to rely on the financial hardship exemptions from both requirements, on the basis that it is in serious financial difficulty, the deal is designed to improve its financial position, and the board plus at least two-thirds of its independent directors have determined the terms are reasonable in the circumstances.

Even so, the board commissioned a special committee of independent directors to review the transaction and retained Beta Finance T.Y.S Ltd., an Israeli financial consulting firm the company describes as an arm’s-length third party, to prepare a fairness analysis. That analysis is expressly not a formal valuation under the Canadian instrument, the company said.

The definitive agreement lands two months after the parties announced a non-binding letter of intent on June 18, 2026. The June framework described Slil assuming roughly C$10.5 million of debt, split between C$7.5 million in retained liabilities and C$3 million in short-term liabilities. The signed deal recasts that structure: the C$3 million is now documented as advance payments already received by IM Cannabis, and the retained-liability assumption is framed at up to C$9.4 million.

What IM Cannabis Is Keeping, and What Shuster Is Buying

What stays with the public company is the Israeli medical cannabis platform: import and distribution operations, retail pharmacies and online delivery channels run through subsidiaries including Focus Medical Herbs, Rosen High Way, R.A. Yarok Pharm and Rivoly Trading and Marketing, as described in the June announcement. What leaves is the European business the company assembled over several years, centered on Adjupharm, its EU-GMP-certified producer and distributor supplying German pharmacies.

That exit closes a chapter that began with high expectations for the German market, which has been among Europe’s most closely watched since adult-use possession was legalized in 2024 and the medical channel expanded. The German market has also turned more demanding for mid-sized distributors: premium-focused Cantourage recently reported a 45% EBITDA climb as it restructured its German revenue mix, and Berlin has moved to tighten prescribing rules for medical cannabis, a draft amendment IM Cannabis itself flagged in its filings as a risk to mail-order flower distribution.

The Balance Sheet Behind the Deal

The company’s interim financial statements for the six months ended June 30, 2026, filed with the U.S. Securities and Exchange Commission, show why the hardship exemption is in play:

• Shareholders’ deficit: C$5.539 million attributable to company shareholders at June 30, 2026, against C$3.73 million at December 31, 2025
• Negative working capital: C$13.062 million at June 30, 2026
• First-half net loss: C$6.852 million on revenue of C$16.268 million, down from C$25.196 million a year earlier
• Cash on hand: C$1.617 million at June 30, 2026
• Deal economics: approximately C$3 million expected pro forma improvement to shareholders’ equity; up to C$9.4 million in retained liabilities moving to the buyer

The filings carry a going-concern notice, with management citing negative working capital, an accumulated deficit of C$276.7 million and reliance on continued debt and equity raises. Since January 2026 the company has issued a series of convertible promissory notes to an institutional investor in tranches ranging from US$225,000 to US$550,000, including a US$250,000 note financing announced August 7, 2026.

What Happens Next

Closing is conditioned on completion of the pre-closing reorganization, a valid tax certificate from the Israel Tax Authority and other consents, with an outside date of September 30, 2026. IM Cannabis says it expects to close fewer than 21 days after filing the material change report on the transaction, a compressed window it describes as necessary given its financial condition, liquidity position and debt obligations. Once closed, the public company left trading on Nasdaq will be, by its own description, an Israel-only medical cannabis operator evaluating additional opportunities, while the German pharmacy distribution business it built through Adjupharm continues under its founder’s private ownership.