Ontario pot producer Canopy Growth buys into German market with $7.2M deal
Company says acquisition will give it a strong position in emerging German market for medical marijuana
SMITHS FALLS, Ont.—The current king of the Canadian medical marijuana industry, Canopy Growth Corp., is moving into the largely-untapped German market with the acquisition of MedCann GmbH Pharma and Nutraceuticals—a St. Leon-Rot, Germany pharmaceutical distributor.
The largest firm in Canada’s booming medical marijuana industry, Canopy said it will pay approximately $7.2 million in stock upfront for MedCann, based on its $10.60 closing price Nov. 25. Canopy will also hand over as many as 490,000 shares to the German company, based on certain milestones over the next two years, adding $5.2 million to the deal at current prices.
“Germany has begun a process of enabling medical access to cannabis and through a policy that recognized Canopy as the first legal supply source from North America,” Bruce Linton, the company’s chairman and CEO, said. “This acquisition establishes a distinct and purely medicinal corporate entity that helps us today but also positions us for domestic medicinal production inside Germany if the regulatory environment shifts.”
Canopy said that while German patients have been able to access medical cannabis since 2005, there is currently no domestic marijuana production.
The Smiths Falls, Ont. company, which recently marched past the $1 billion market valuation milestone, said the deal will give it a strong position in the emerging German market for medical marijuana.