Canopy Growth to Buy Supreme Cannabis for $435 Million

Canopy Growth to Buy Supreme Cannabis for $435 Million
Canopy Growth shares rose on Thursday after the marijuana company said it would buy Supreme Cannabis for C$435 million (US$346 million) of stock and cash.

Under the terms, Canopy Growth, Smith Falls, Ontario, agreed to pay 0.01165872 share and C$0.0001 cash for each share of Supreme, Toronto.

The transaction provides Supreme Cannabis holders with a 66% premium based on the Wednesday closing prices of the two companies on the Toronto Stock Exchange.

Canopy Growth shares traded on Nasdaq recently changed hands at $30.04, up 0.3%. They have nearly doubled (up 93%) over the past six months amid as investors were optimistic about the prospects of legalization of pot in the U.S. CGC shares have also fallen 39% since Feb. 10.

Supreme Cannabis shares traded over the counter in the U.S. closed at 20.6 cents Wednesday, down 2.8%. At last check they were up 36% at 28 cents.

Via the deal, the companies said, Canopy acquires a top premium brand, 7Acres.

“Brand growth is anticipated with distribution supported by Canopy’s robust sales and distribution network as well as superior consumer insights and research-and-development capabilities,” they said.

Supreme Cannabis holders would benefit from Canopy’s U.S. cannabidiol business and “conditional positioning for continued exposure to the U.S. market expansion,” the companies said.

“Further value will be derived through [Supreme’s] scalable Kincardine, Ontario, production facility, which has a demonstrated record of producing premium flower at low cost.”

The deal is expected to close in June, subject to conditions including regulatory clearances, court approval, and a vote of Supreme Cannabis holders.

Earlier this month, Canopy said it had completed the acquisition of AV Cannabis, another prominent Ontario cannabis brand.

Source:  https://www.msn.com/en-us/money/markets/canopy-growth-to-buy-supreme-cannabis-for-435-million/ar-BB1fqVT3?ocid=BingNewsSearch&mc_cid=c58ca6212a&mc_eid=178dec0b63

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