Canopy Growth

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Canopy Growth Corporation
Medical marijuana and, in Canada, recreational marijuana
Traded asTSXWEED and NYSECGC
IndustryCannabis
PredecessorTweed Marijuana Inc.
Founded2013 (2013)
FoundersBruce Linton
Headquarters,
Area served
Worldwide
ProductsMedical cannabis, recreational cannabis
RevenueIncrease C$ 40 million (2017)[1]
Decrease C$ -15 million (2017)[1]
Decrease C$ -17 million (2017)[1]
Total assetsIncrease C$ 678 million[1]
Total equityIncrease C$ 615 million[1]
Websitewww.canopygrowth.com
www.tweed.com
www.spectrumcannabis.ca

Canopy Growth Corporation, formerly Tweed Marijuana Inc., is a cannabis company based in Smiths Falls, Ontario. Tweed was founded by Bruce Linton and Chuck Rifici[2] in 2013,[3][4] and renamed Canopy Growth Corporation in 2015. As of mid April 2019, Canopy was the world's largest cannabis company, based on the value of all shares, or market capitalization.[5] At that time, Constellation Brands Inc. controlled over 35% percent of the company.[6]

History[edit]

Tweed branded cannabis as sold in Alberta

Bruce Linton is Founder, Chairman and Co-CEO[7] and Mark Zekulin is Co-CEO and President of the company.[8][9][10] The company was the first federally regulated, licensed, publicly traded cannabis producer in North America, traded on the Toronto Stock Exchange as WEED. It began trading as CGC on the New York Stock Exchange on May 24, 2018,[11] as the first cannabis producer on the NYSE.[12] On October 17, 2018[13], marijuana became legal in Canada for recreational use.[14] Canada's first legal cannabis sale was made at midnight by CEO Bruce Linton at a Tweed store in St. John's, Newfoundland and Labrador.[15]

Prior to that date, cannabis was legal only for medical purposes in Canada; growers were licensed by Health Canada under the Access to Cannabis for Medical Purposes Regulations (ACMPR).[16] The company was described as "Canada's first cannabis unicorn with a $1 billion dollar valuation" by the Financial Post news organization in November 2016.[17] The company was renamed to Canopy Growth Corp. in September 2015 with two established brands.[18] Specifically, CGC is the parent company of licensed cannabis producers Tweed Inc., Tweed Farms Inc., Spectrum Cannabis., as well as newly acquired companies.

Tweed operates out of the former Hershey's chocolate factory in Smiths Falls, Ontario,[19] and operates the Tweed Farms greenhouse in Niagara-on-the-Lake.[20][21]

In provinces where the private sector is allowed to sell cannabis, the company has opened retail stores via its subsidiary Tweed Inc. [22][23][24] As of April 2019, Tweed stores were open in Manitoba, Newfoundland and Labrador, and Saskatchewan.[25]

In August 2018, Constellation Brands (a beer, wine and spirits producer) announced that it would invest an additional C$5 billion (US$3.8 billion) in Canopy Growth, giving it a 35% interest in the company,[26] up from the previous 10%. President Bruce Linton said the additional funds would be used for international expansion wherever federal laws allow it.[27][28] Future marketing plans include products such as cannabis-infused beverages and sleep aids.[29] After the Constellation deal was announced, the market value of Canopy Growth rose to nearly US$12 billion.[30][31]

By October 5, 2018, the company's market capitalization exceeded US$14 billion[32] and Linton was named 2018 CEO of the Year by the Ottawa Board of Trade and Ottawa Business Journal.[8] [9]

Overseas operations[edit]

In addition to operations in Canada, Canopy Growth has a partnership agreement in Spain with pharma company Alcaliber S.A.,[33] owns a subsidiary in Germany that imports medical cannabis, Spektrum Cannabis GmbH,[34] and has a partnership with Spectrum Cannabis Denmark ApS, a medical cannabis grower.[35] The company is also involved in the business in Jamaica, Chile and Brazil,[36] as well as in Australia. In 2018, the company acquired Annabis Medical, a distributor in the Czech Republic, and medical marijuana supplier Daddy Cann Lesotho in Africa.[23] In February 2019 Canopy set up a partnership with the Beckley Foundation to distribute medical cannabis in the UK.[37]

Expansion[edit]

Subsequent acquisitions for this corporation included Vert Medical, the German cannabis distributor MedCann (now Spektrum Cannabis) and a majority interest in Quebec's Groupe H.E.M.P.CA Inc. In early December 2016, Canopy Growth Corp. announced a friendly takeover bid of another licensed Ontario-based producer, Mettrum Health (CVE:MT). The deal, pending the approval of Mettrum's board, was closed in January 2017.[38]

In addition to sales in the domestic market, Canopy Growth began selling medical cannabis products in Germany and Brazil in 2016. However, the company was operating at a loss, presumably because of the significant expenditures it was making to acquire competitors in preparation for significantly increased cannabis demand by the recreational use market expected to commence in 2018. Legislation to legalize cannabis for recreational use was approved by the House of Commons of Canada in November 2017;[39] the Senate of Canada was expected to vote on the Cannabis Act (Bill C-45) on June 7, 2018.[40] Actual sales to casual users was likely to commence in January 2018.[41][42] In January 2019, Canopy Growth announced that it was granted a licence by New York State to process and produce hemp in the United States.

On January 27, 2017, Canopy and Mettrum Health Corp. announced the takeover of Mettrum by Canopy. The deal was awaiting approval by the Ontario Superior Court of Justice. At around the same time the deal had closed, Canopy completed the purchase of the entire former Hershey's chocolate factory, adding 50 percent more production space at that location.[43] The takeover of Mettrum has resulted in "the creation of a world-leading diversified cannabis company with six licensed facilities and a licensed production footprint of approximately 665,000 sq. ft. with significant acreage for expansion".

In February 2018, Canopy Growth Corporation and Sunniva Inc., a North American provider of medical cannabis, announced a supply agreement. Sunniva's Canadian subsidiary, Sunniva Medical Inc., committed to sell Canopy 45,000 kilograms of premium quality cannabis annually for a two-year period commencing in the first quarter of 2019.[44]

Expansion into Europe continued in April 2019 with the acquisition of licensed cannabis producer Cáñamo y Fibras Naturales, S.L. which is based in Spain. By that time, the Company already owned a licensed production site in Odense, Denmark, as well as the Storz and Bickel facility in Tuttlingen, Germany.[45]

A tentative expansion step into the US market was also made in April 2019. The company concluded a deal to pay US$300-million for the right to buy cannabis company Acreage Holdings Inc. a company located in British Columbia but with a diverse portfolio of cannabis cultivation, processing and dispensing operations in the US.[46] No actual purchase was made, but the agreement states that Canopy will buy 100% of Acreage shares for US$3.4 billion if the American federal government legalizes cannabis. In an interview with The Canadian Press, Vivien Azer, senior research analyst with Cowen, said that Acreage was a suitable acquisition target because it had the greatest market penetration in the U.S. and believed that the deal would "likely prove helpful in pushing for a change in U.S. laws surrounding cannabis". [47]

References[edit]

  1. ^ a b c d e "Canopy Growth Corporation". TMX Money. QuoteMedia. Retrieved 21 February 2018.
  2. ^ "Tweed Marijuana co-founder Chuck Rifici resigns from board".
  3. ^ "Former Ontario chocolate factory may become medical marijuana grow-op".
  4. ^ "$1.3B medical marijuana free market coming to Canada".
  5. ^ "Canopy Growth Is Near a Deal to Acquire Acreage Holdings". Blommberge. 17 April 2019. Retrieved 19 April 2019.
  6. ^ "Marijuana Bet Paying Off for Alcohol Giant Constellation Brands". Blommberge. 18 April 2019. Retrieved 19 April 2019.
  7. ^ https://www.canopygrowth.com/about/leadership-team/
  8. ^ a b "Canopy Growth's Bruce Linton named Ottawa's CEO of the Year - Ottawa Business Journal". obj.ca.
  9. ^ a b "Company Overview of Canopy Growth Corporation". www.bloomberg.com.
  10. ^ "How one small Ontario town became the cannabis capital of Canada - The Star".
  11. ^ "Canopy Growth kicks off first day on the New York Stock Exchange". 24 May 2018.
  12. ^ "Canopy Growth applies to become first pot producer listed on the NYSE". 14 May 2018.
  13. ^ "Marijuana to be legal in Canada starting October 17, Trudeau confirms". Global News. Retrieved 2018-06-21.
  14. ^ https://www.ctvnews.ca/canada/first-legal-purchase-of-cannabis-made-in-newfoundland-and-labrador-1.4137180
  15. ^ Tobin, Stephanie (October 16, 2018). "First legal weed sold in Canada at Newfoundland shops". CBC Newfoundland and Labrador. Retrieved April 30, 2019.
  16. ^ "Authorized Licensed Producers for Medical Purposes". Health Canada - Drugs and Health Products. Health Canada. 23 November 2016. Retrieved 2 December 2016.
  17. ^ https://business.financialpost.com/commodities/agriculture/canopy-growth-is-canadas-first-cannabis-unicorn-with-1-billion-valuation
  18. ^ Koven, Peter (17 September 2016). "Tweed Marijuana renames itself Canopy Growth Corp as it charts growth path at AGM". Financial Post. Toronto. Retrieved 2 December 2016.
  19. ^ Tweed. "About Us". Tweed. Archived from the original on 2016-08-07. Retrieved 2016-06-10.
  20. ^ "Health Canada approves NOTL marijuana facility".
  21. ^ "Weed Is Serious Business for Canada's Go-To Pot Banker". www.bloomberg.com. April 3, 2018.
  22. ^ https://www.ctvnews.ca/canada/first-legal-purchase-of-cannabis-made-in-newfoundland-and-labrador-1.4137180
  23. ^ a b "It Got Lost in the Hoopla, but Canopy Growth Had a Really Great Q1". Fox Business. 16 August 2018. Retrieved 16 August 2018.
  24. ^ "Smiths Falls cannabis company Tweed prepares for privatized pot sales". Global News. 14 August 2018. Retrieved 16 August 2018.
  25. ^ https://www.tweed.com/en/find-a-store
  26. ^ "Marijuana Bet Paying Off for Alcohol Giant Constellation Brands". Blommberge. 18 April 2019. Retrieved 19 April 2019.
  27. ^ "Constellation Brands invests $5B to boost stake in pot producer Canopy Growth - The Star".
  28. ^ "'This is rocket fuel': Constellation Brands spending $5 billion to boost stake in Canopy Growth". 15 August 2018.
  29. ^ Sheetz, Michael (15 August 2018). "Beer maker Constellation ups bet on cannabis with $4 billion investment in Canopy Growth".
  30. ^ Owram, Kristine (22 August 2018). "With $5-billion Constellation deal, Canopy Growth is emerging as the Google of pot". Financial Post. Retrieved 23 August 2018.
  31. ^ "Canopy Growth". Market Watch. Retrieved 23 August 2018. Market Cap $11.19B
  32. ^ "Canopy Growth Corporation [WEED] - Canopy Growth Corporation Stock Quotes - TMXmoney". web.tmxmoney.com.
  33. ^ "Alcaliber - Canopy Growth".
  34. ^ "Spektrum Cannabis - Canopy Growth".
  35. ^ "Spectrum Cannabis Denmark - Canopy Growth".
  36. ^ "Pair of deals point towards Canadian cannabis interest in South America". 10 April 2018.
  37. ^ Editor, The. "Getting UK Cannabis Licenses". The Stop and Chat. Retrieved 2019-02-17.
  38. ^ Israel, Solomon (1 December 2016). "Canopy Growth to merge with Canadian competitor Mettrum - Canada's biggest cannabis grower continues its string of acquisitions". CBC News. CBC. Retrieved 2 December 2016. Mettrum has established a line of cannabis products that work well in a medical context and will transition naturally into a natural and healthy lifestyle market
  39. ^ "Federal marijuana legislation approved by House of Commons, moves on to Senate" – via The Globe and Mail.
  40. ^ "Legalization date still up in the air, federal cannabis czar says". 24 May 2018.
  41. ^ Cain, Patrick (9 October 2016). "How will legal pot be sold? Three things that might happen, and one that won't". Global News. Global News, a division of Corus Entertainment Inc. Retrieved 1 December 2016. I see some kind of government control at the level of distribution, but I'm not sure what that's going to look like. I find it hard to believe that they are going to allow dispensaries to simply cross over in their current form.
  42. ^ Cullen, Catherine (30 November 2016). "8 burning questions about the coming federal pot report Who can buy and sell pot, where it will be sold, and who gets the profits, all up in the air". CBC News. CBC. Retrieved 30 November 2016.
  43. ^ Freeman, Sunny (14 February 2017). "Canopy Growth Corp almost triples revenue as number of patients soars". Herald. Calgary. Retrieved 14 February 2017. FINANCIAL POST 02.14.2017
  44. ^ "Canopy And Sunniva: A Win-Win Deal For Both". Seeking Alpha. 8 March 2018. Retrieved 16 April 2019. Sunniva successfully secured its first distribution partner for an estimated 45% of its total Canada production.
  45. ^ "Canopy Growth completes acquisition of Canamo y Fibras Naturales". The Fky. 16 April 2019. Retrieved 16 April 2019.
  46. ^ "The Acreage story". Acreage Holdings. Retrieved 19 April 2019.
  47. ^ "Canopy signs US$3.4B deal to buy N.Y.-based Acreage Holdings if pot legal in U.S." Financial Post. 18 April 2019. Retrieved 19 April 2019. if cannabis production and sale becomes federally legal in the United States — which they anticipate could happen within the next year.

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