Ottawa-area medical marijuana grower Canopy Growth Corp. (TSX: CGC) is diversifying into new cannabis products with the purchase of a Quebec hemp products producer.
Drummondville-based Groupe Hemp is licensed to cultivate hemp and extract oil from hemp seeds, Canopy Growth said in a statement. Hemp is a cannabis strain with a low concentration of THC, the chemical that gets users stoned.
Groupe Hemp has developed various products, including skin care treatments as well as pet care oils and soaps.
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Canopy Growth is paying $300,000 for Groupe Hemp in addition to assuming $276,000 in debt and the issuance of 258,037 shares. Canopy Growth’s stock is currently trading at approximately $7 on the Toronto Stock Exchange, which would make the shares worth some $1.8 million.
Canopy Growth also said this week that it had purchased another Quebec company, Saint-Lucien-based Vert Médical. The firm is applying for a Health Canada licence to grow medical marijuana.
Canopy Growth purchased its lease and the right to acquire 90 acres of land as well as a 7,000-square-foot indoor growing and office facility.
“We have spent the last few months assessing the market for potential acquisitions, and Vert is one of a select few that stood up to our financial and business evaluation,” said Bruce Linton, Canopy Growth’s chairman and CEO.
In exchange for the shares of Vert Médical, Canopy Growth will assume and immediately pay debt of approximately $500,000 in addition to issuing up to 294,900 common shares.
The acquisitions give Canopy Growth a stronger presence in Quebec, where the company’s subsidiaries already account for 30 per cent of medical cannabis shipments made to registered patients in Quebec, according to the company.
Founded in 2014 as Tweed Marijuana, Smiths Falls-based Canopy Growth is Canada’s largest medical marijuana producer. Mr. Linton told an Ottawa business audience in September that it also wants to be the No. 1 firm in the recreational market once marijuana is legalized for casual consumption in Canada.
