Canopy Growth to Acquire Assets of Colorado-Based Hemp Innovator Ebbu
SMITHS FALLS, ON, Oct. 15, 2018 /CNW/ – Canopy Growth Corporation (“Canopy Growth” or the “Company”) (TSX: WEED) (NYSE: CGC) today announced that it has entered into an agreement to acquire the assets of ebbu, Inc. (“ebbu”), an Evergreen, Colorado-based hemp research leader. The transaction will complement and accelerate multiple core verticals operating under Canopy Growth’s group of companies.
Intellectual Property (“IP”) and R&D advancements achieved by ebbu’s team apply directly to Canopy Growth’s hemp and THC-rich cannabis genetic breeding program and its cannabis-infused beverage capabilities. In addition, ebbu’s IP portfolio will contribute to the clinical formulations program being executed by Canopy Health Innovations, a wholly owned subsidiary of the Company. Canopy Growth operates a rapidly emerging, field-scale hemp operation based in Saskatchewan and by applying ebbu’s IP, the Company has the potential to vastly reduce the cost of CBD production, a sought-after cannabinoid in both the wellness and medical spaces.
Beyond the technological edge this transaction provides, we are pursuing this acquisition because Canopy shares ebbu’s core ethos of building consumer trust. We collectively believe consumer trust is achieved by driving the scientific agenda needed to build predictable, repeatable outcomes and layering on brand power.
Mark Zekulin, Co-CEO & President, Canopy Growth
Staying with Canopy Growth’s long-held position surrounding business operations in the United States, this transaction would not have been pursued were it not in clear accordance with current US federal law. Canopy Growth, through a newly formed subsidiary, will employ ebbu’s assets and personnel to conduct R&D. There will be no production or sale of products resulting from such R&D in the United States unless and until it would be federally legal to do so.
The same technology platform can be utilized to produce other novel cannabinoids at scale and continue the process of unlocking the potential of lesser-understood elements in the cannabis plant, with the IP also being deployed at Canopy’s Smiths Falls-based research facilities.
At closing, Canopy Growth will pay CDN$25 million in cash and issue 6,221,210 Company common shares (“shares”) to ebbu in exchange for the assets being acquired. Up to a further CDN$100 million in purchase price shall be payable if certain scientific related milestones are achieved within two years following closing. Canopy Growth will have the option of satisfying such milestone payments in cash, shares or a combination of cash and shares. If such payments are satisfied in shares, the number of shares shall be calculated based on the volume weighted average price of the shares on the TSX for the 20 trading days immediately prior to the date of achievement of the applicable milestone.
The transaction requires regulatory approval, including approvals by the Toronto Stock Exchange and New York Stock Exchange and will give rise to ongoing disclosures required by CSA Staff Notice NI 51-352 for US transactions. The asset acquisition is anticipated to close in November 2018.
Here’s to Future (IP) Growth.
About Canopy Growth Corporation
Canopy Growth is a world-leading diversified cannabis and hemp company, offering distinct brands and curated cannabis varieties in dried, oil and Softgel capsule forms. From product and process innovation to market execution, Canopy Growth is driven by a passion for leadership and a commitment to building a world-class cannabis company one product, site and country at a time. The Company has operations in 12 countries across five continents. The Company is proudly dedicated to educating healthcare practitioners, conducting robust clinical research, and furthering the public’s understanding of cannabis, and through its partly owned subsidiary, Canopy Health Innovations, has devoted millions of dollars toward cutting edge, commercializable research and IP development. Through partly owned subsidiary Canopy Rivers Corporation, the Company is providing resources and investment to new market entrants and building a portfolio of stable investments in the sector. From our historic public listing on the Toronto Stock Exchange and New York Stock Exchange to our continued international expansion, pride in advancing shareholder value through leadership is engrained in all we do at Canopy Growth. Canopy Growth has established partnerships with leading sector names including cannabis icon Snoop Dogg, breeding legends DNA Genetics and Green House seeds, and Fortune 500 alcohol leader Constellation Brands, to name but a few. Canopy Growth operates ten licensed cannabis production sites with over 4.3 million square feet of production capacity, including over 500,000 square feet of GMP certified production space. For more information visit www.canopygrowth.com