Canopy Growth Corporation (TSX:WEED) said it has doubled its licensed domestic production capacity and announced acquisition of Czech Medical cannabis distributor
SmallCapPower | April 18, 2018: Canopy Growth Corporation (TSX:WEED) announced two key developments over the weekend – one, doubling of licensed domestic production capacity with receipt of new licenses; and the other, the acquisition of Czech Medical cannabis distributor, Annabis Medical s.r.o. While the production capacity expansion further solidifies its market-leading position in Canada and prepares for the upcoming adult-use market, the Czech distributor acquisition builds on its leadership position in the European medical cannabis space.
Canopy Growth announced the receipt of additional licensing late on Friday at both greenhouse facilities operating under its majority-owned BC Tweed Joint Venture. At the already-operating 1.3 million sq. ft. greenhouse facility in Aldergrove, BC, the additional licensing expands growing space to 840,000 sq. ft. from 400,000 sq. ft. licensed in February 2018. The second BC Tweed site, which is also the world’s largest cannabis facility with 1.7 million sq of greenhouse production space, received a cultivation license for its first 900,000 sq. ft. of growing space. With this additional licensing, Canopy Growth doubles its current licensed domestic platform to 2.4 million square feet and work continues at various sites to achieve its long-term goal of 5.6 million sq. ft of total licensed production capacity.
Following the definite agreements signed on Sunday, the acquisition of Annabis Medical was completed on Monday. Annabis Medical is Czech Republic’s largest medical cannabis company and holds federal Czech licenses to import and distribute cannabis products. The total deal value is ~C$2.5 million, comprising the issuance of 50,735 common shares valued at $1.49 million to Dr. Kazík, founder and CEO of Annabis, and an additional 34,758 common shares valued at $1.02 million. The acquisition further strengthens Canopy Growth’s European distribution network that encompasses recent supply agreement with Spanish pharmaceutical company Alcaliber S.A, supplying Germany with its own subsidiary, Spektrum Cannabis GmbH; and a joint venture ‘Spectrum Cannabis Denmark ApS’ with Danish Cannabis ApS to establish a 40,000 m2 production facility in Odense, Denmark.
Shares of Canopy Growth reacted positively to the two latest developments, closing 3.6% up at $30.90 on Monday. Canopy Growth is the world’s largest cannabis producers and is the most valued cannabis company in Canada with a market cap of $6.15 billion, 88.1x its TTM sales of $69.8 million.
Disclosure: Neither the author nor his family own shares in the company mentioned above.
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