Canopy Growth Corp.
said Thursday it has reached an agreement to acquire Toronto-based Supreme Cannabis Co. Inc.
in a stock and cash deal valued at about C$435 million ($345.6 million). Under the terms of the deal, Supreme Cannabis shareholders will receive 0.01165872 of Canopy stock for each share owned, plus C$0.0001 in cash. That is equal to a premium of about 66% for Supreme Cannabis shareholders based on the closing prices of both stocks on the Toronto Stock Exchange on Wednesday. The deal gives Canopy access to premium Canadian brand 7Acres, along with consumer insights and R&D capabilities. The combined pro forma market share is estimated to be 23.3% of the premium flower segment in Ontario and 21.4% in British Columbia, the companies said in a joint statement. Canopy expects the deal to generate synergies of about C$30 million within two years. The deal is expected to close by the end of June. Supreme’s U.S.-listed shares soared 16.5% premarket on the news. Canopy was up 1.4% and have gained 21.5% in the year to date, while the Cannabis ETF
has gained 50% and the S&P 500
has gained 8.6%.