A Canadian company is positioning itself to become the first truly major corporation of the legal cannabis era.
Canopy Growth and beer, wine and liquor company Constellation Brands last week closed Constellation’s $4 billion investment in the Canadian cannabis firm.
“We’re excited to expand our strategic partnership with Canopy Growth and to begin helping them build the global scale needed to win long-term,” said Rob Sands, chief executive officer, Constellation Brands. “The global cannabis market presents a significant growth opportunity and Canopy Growth is well-positioned to establish a strong leadership position in this fast-evolving category.”
The investment gives Constellation a 37 percent stake in Canopy, and positions Canopy for major growth as the legal cannabis market expands.
“Our cash position opens up a world of opportunity for us,” said Bruce Linton, chairman and co-chief executive officer, Canopy Growth. “Relative to our valuation, we have never been in a better position to create shareholder value. This investment was a landmark moment for the entire sector when it was announced. Now that the capital is Canopy’s to deploy, we’re going to quickly get to work increasing our lead by adding strategic assets around the world.”
And Canopy hasn’t been slow putting its financial strength to work. The company recently announced the acquisition of ebbu, Inc., a Colorado-based hemp research firm.
According to Canopy’s press release:
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 cannabisinfused 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,” said Mark Zekulin, CoCEO & President, Canopy Growth. “We collectively believe consumer trust is achieved by driving the scientific agenda needed to build predictable, repeatable outcomes and layering on brand power.”