Canopy Growth Reaches Agreement To Acquire Supreme Cannabis

Canopy Growth Reaches Agreement To Acquire Supreme Cannabis
TerreDiCannabis_ / Pixabay

Canopy Growth Corp (NASDAQ:CGC) (TSE:WEED) has agreed to acquire The Supreme Cannabis Company Inc (OTCMKTS:SPRWF) (TSE:FIRE) in a transaction worth $435 million. Shares of The Supreme Cannabis Company, a penny stock, surged 56% in early trading after the announcement, while Canopy Growth stock slumped by more than 2% in early trading.

Get The Full Series in PDF

Get the entire 10-part series on Charlie Munger in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.

Q1 2021 hedge fund letters, conferences and more

Canopy Growth To Acquire Supreme Cannabis Company

In a press release this morning, the two companies announced that Canopy would acquire all of Supreme Cannabis' issued and outstanding shares for $435 million. Supreme Cannabis shareholders will receive 0.01165872 of a common share in Canopy Growth and 0.0001 of a cent in cash in exchange for each Supreme Cannabis share they hold.

Jim Chanos Unveils Lastest Short As Fund Manager Bets On Further Market Declines

Data 1639507577Jim Chanos has a new short target in his sights. Earlier this week, the hedge fund manager disclosed that he is betting against "legacy" data centers that face growing competition from the trio of technology giants, which have previously been their biggest customers. The fund manager, who is best known for his winning bet against Read More

The deal offers a premium of about 66% per Supreme Cannabis share, based on the closing prices of both companies' shares on the Toronto Stock Exchange on Wednesday. It's expected to offer multiple benefits to Canopy and Supreme Growth. For example, after the acquisition, Canopy Growth will have a stronger brand portfolio that includes 7ACRES, one of the top premium brands in Canada.

Both companies' brands are expected to grow as Supreme Cannabis benefits from Canopy's strong sales and distribution network and R&D capabilities. In addition to the market premium, Supreme Cannabis investors will also see benefits from Canopy's CBD business in the U.S. and "conditional positioning for continued exposure to the U.S. market expansion."

Additional value will be seen through the Kincardine production facility in Ontario, which is scalable and has been producing premium flower at low costs.

Highlights Of The Transaction

The two companies highlighted several benefits from the transaction. The combination solidifies Canopy's leadership position in Canada's recreational weed market, which is well-positioned for growth by combining the company with Supreme Cannabis, one of Canada's top 10 cannabis companies. Together, the merged company will have a 13.6% share of the recreational cannabis market in Canada. The firm will hold about 23.3% of the premium flower market in Ontario and 21.4% in British Columbia.

Canopy Growth and The Supreme Cannabis Company expect to achieve about $30 million in cost synergies within two years of the closing of the transaction. The synergies are expected to span across cost of goods sold and sales, general, and administrative expenses as Canopy optimizes and integrates Supreme Cannabis' operations and shared services.

The merger is a continuation of the consolidation trend that has been sweeping the global cannabis industry. The consolidation has included everything from small dispensaries to companies merging supply chain components into one business.

Updated on

Michelle Jones is editor-in-chief for and has been with the site since 2012. Previously, she was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Email her at
Previous article Look Ahead To FTSE 350 Companies Reporting From 12 To 16 April
Next article NOW & Gloria Steinem Endorse Tali Farhadian Weinstein

No posts to display