Canopy Growth, one of the world’s largest producers of cannabis, announced this Thursday the purchase of one of its main rivals, Supreme Cannabis, in an operation valued at 435 million Canadian dollars (US $ 345.6 million), to consolidate its position in Canada.
In this country the recreational marijuana use it is legal since the end of 2018.
The acquisition will mean that Supreme Cannabis shareholders will receive 0.0116 Canopy Growth shares and US $ 0.0001 for each of their shares, which is 66% more than the closing value of the shares on April 7.
Canopy Growth said in a statement that the transaction will benefit the two companies.
Thus, on the one hand “Canopy will have a strengthened range of brands including one of the main high-end brands in Canada, 7ACRES“And on the other hand,” Supreme Cannabis shareholders will benefit from Canopy’s CBD (cannabidiol) business in the United States, “the note added.
The sector CBD, a compound from hemp and cannabis plants that is increasingly used as a dietary supplement, is experiencing rapid growth in the United States since the legalization of cannabidiol in 2018.
In addition to marijuana, Canopy has products in the health and nutrition sectors in Canada, the United States and Europe through the BioSteel brand.
The purchase of Supreme Cannabis also provides Canopy Growth with a new source of low-cost cannabis, thanks to the company’s hybrid greenhouse in the Canadian town of Kincardine that “has demonstrated the ability to consistently produce high-quality flower from high-demand strains, to low cost and with significant growth potential “.
David Klein, Canopy’s CEO, welcomed the company’s reaching more consumers with Supreme’s high-end brands and high-quality products, further cementing its leadership.
For her part, Beena Goldenberg, the president of Supreme Cannabis, stressed that this transaction will be beneficial for all the company’s stakeholders.
The agreement must be approved by the courts as well as by two-thirds of the votes that Supreme shareholders cast at an extraordinary shareholders meeting to be held in June of this year.