Her’s their Summary..
Canopy acquired hemp research firm ebbu for $450 million with $25 million in cash and 6.2 million of Canopy shares.
Canopy has already built out its Canadian hemp strategy through several acquisitions in the Canadian province of Saskatchewan.
The deal with ebbu will provide valuation IP and research resources to continue Canopy’s IP strategy within its Canopy Health division.
Earlier this week Canopy Growth (CGC) announced its acquisition of U.S.-based hemp research company ebbu for $25 million in cash and 6.2 million in Canopy shares valuing the latter at around $450 million. The deal also included certain milestone payments of up to $100 million within two years after closing. The deal came as no surprise to us and marks yet another hemp acquisition for Canopy. Many investors thought this was the first hemp acquisition for Canopy which is incorrect. We will discuss Canopy’s history with hemp and why this deal is just another piece of the puzzle for a company that is looking to dominate every piece of the cannabis puzzle.
(All amounts in C$ unless other noted)
Hemp Industry
When we wrote “The True Reasons Why Coca-Cola Might Prefer Aurora Cannabis“, we discussed in detail the potential of CBD with its health and wellness features and how easy it is to grow hemp. There is no doubt that hemp and CBD has a huge market in the consumer segment and Canopy can’t wait to get in there when the U.S. laws change, however, it is limited by the current legal system because it has to be extra careful now that it is essentially controlled and run by the U.S. beverage giant Constellation Brands (STZ). THC is straightforward and relatively well-understood and accepted by the consumers as a recreational product. However, CBD is another category that is lacking research and has the potential to yield significant strategic advantage for players that can get a headstart.
More at https://seekingalpha.com/article/4217027-canopys-secret-ambition-dominate-hemp-industry
