IM Cannabis Corp. Enters into Letter of Intent to Sell its European Activities, Expects to Significantly Reduce Debt by CAD$10.5 million

IM Cannabis Corp. (NASDAQ: IMCC) has announced a significant transaction involving the sale of its European-focused assets to Slil.com Holding Ltd. for a total deal value of CAD$10.5 million. The non-binding letter of intent, disclosed on June 18, 2026, outlines that Slil.com Holding will assume approximately CAD$10.5 million of debt from IMC, thereby substantially reducing the company's financial liabilities. Following the completion of this transaction, IM Cannabis will retain its core operations in Israel, allowing it to focus on its domestic market.

The transaction involves the sale of I.M.C. Holdings Ltd., a wholly owned subsidiary of IM Cannabis that primarily manages the company's European operations, including Adjupharm GmbH in Germany and interests in Xinteza API Ltd. and Shiran Societe Anonyme. By divesting these assets, IM Cannabis aims to streamline its operations and improve its working capital position. The move is anticipated to enhance cash flow and strengthen the balance sheet, thereby positioning the company for potential future investment opportunities.

Slil.com Holding Ltd. is a privately-held entity that is beneficially owned and controlled by Oren Shuster, who also serves as the CEO of IM Cannabis. This relationship raises the transaction's profile as a related party deal, necessitating careful scrutiny under Multilateral Instrument 61-101, which governs minority shareholder protection in special transactions. The board of directors has established a special committee of independent directors to evaluate the fairness of the transaction, with an independent financial consulting firm, Beta Finance T.Y.S Ltd., engaged to assist in this assessment.

The cannabis sector continues to evolve, with companies increasingly focusing on operational efficiency and financial health in a competitive landscape. The decision by IM Cannabis to divest its European assets reflects a strategic pivot towards consolidating its operations in Israel, where the company has established a robust presence. This move not only mitigates debt but also allows IM Cannabis to allocate resources more effectively within its core market, which is critical given the ongoing challenges and regulatory complexities facing the cannabis industry.

Overall, this transaction underscores a broader trend within the cannabis sector, where companies are re-evaluating their portfolios to enhance operational focus and financial stability. As the market matures, stakeholders will likely witness more strategic divestitures and consolidations as firms seek to optimize their business models and navigate the evolving regulatory environment. The successful completion of this transaction could serve as a catalyst for IM Cannabis, enabling it to pursue new growth opportunities while reinforcing its commitment to the Israeli market.