Even with the Oct. 17 legalization of pot for recreational use drawing closer by the day, Canopy Growth Corp. is signalling it has no intention of turning its back on its medicinal cannabis roots.
The Smiths Falls-based firm said Tuesday it has closed an all-stock deal to gain full ownership of Canopy Health Innovations (CHI) and its subsidiary, Canopy Animal Health, bringing the cannabis research ventures completely under Canopy Growth’s umbrella.
Shareholders received 0.3790 common shares of Canopy Growth for each share of CHI they owned. The cash value of the deal was not released.
Canopy Growth (TSX:WEED)(NYSE:CGC) said the move to acquire all outstanding shares in the companies and make them a wholly-owned subsidiary of their parent firm will lead to more extensive research on medical uses of cannabis and will ultimately make pot-based pharmaceuticals more accessible to patients.
“With the acquisition complete, we’re excited to further accelerate Canopy Health’s vision to create evidence-based cannabis formulations and delivery mechanisms that will serve patients worldwide,” Canopy Growth president and co-CEO Mark Zekulin said in a statement.
The company said CHI’s management group “will remain in place to continue pursuing IP protection, clinical work and product formulation for both human and animal cannabinoid programs alongside Canopy Growth's team.”
According to a news release, Canopy Health Innovations’ IP portfolio includes 39 applications filed with the United States Patent Trade Office. Last spring, the company partnered with Britain’s Beckley Foundation think-tank to launch Beckley Canopy Therapeutics, which researches and develops cannabis-based medications.
Tuesday’s deal is the continuation of a busy summer for Canopy Growth, which has expanded through a series of acquisitions and recently raised $500 million in convertible notes to help finance its buying spree.
In mid-July, the firm acquired Hiku Brands in a deal worth nearly $270 million. Hiku Brands was the parent company of the Tokyo Smoke coffee shops, which also sell pot paraphernalia, and owned numerous cannabis brands, including female-focused Van der Pop and Quebec-focused Maïtri, as well as a B.C.-based licensed producer.
Earlier last month, Canopy Growth launched a Latin American subsidiary and acquired Colombian medical pot enterprise Spectrum Cannabis Colombia in a deal valued at nearly $46 million.
Shares in Canopy Growth were up nearly two per cent to $34.50 in mid-afternoon trading on the Toronto Stock Exchange.