Canopy Growth Completes Sale of Non-Core Subsidiary for $7.0 Million and Enters Three Year Product Supply Agreement
Canopy Growth Corporation (TSX:WEED) (“Canopy Growth” or the “Company”) is pleased to announce that it has completed a previously announced agreement with Cannabis Care Canada Inc. (“CCC”) to sell its wholly-owned subsidiary Mettrum (Bennett North) Ltd. (“Bennett Road North”), which is licensed by Health Canada under the Access to Cannabis for Medical Purposes Regulations (ACMPR) to produce and sell dried cannabis and cannabis oil.
CCC is financially backed by Laborers International Union of North America (“LiUNA”), North America’s single largest construction union with over 100,000 Canadian members. Under the terms of the agreement, CCC has paid the Company $7.0 million in cash to acquire Bennett Road North and entered into a three-year “take or pay” Supply Agreement with Canopy Growth for high quality dried flowers and refined cannabis resin, with the sale of product at Canopy Growth’s discretion.
As part of the transaction, CCC will assume all outstanding obligations associated with Bennett Road North. The main Mettrum Bowmanville facility, also on Bennett Road, is unaffected by this transaction. It is now in full production following post-acquisition retrofit and expansion work that has increased output by over 200%.
“Entering into an agreement of this scale with Cannabis Care Canada signals loud and clear that attitudes towards cannabis are transforming across mainstream society as workers and employers increasingly recognize the merits of medical cannabis over other existing alternatives,” said Bruce Linton, Chairman & CEO, Canopy Growth.
Bennett Road North will be renamed Starseed Medicinal Inc. (“Starseed”) a wholly-owned subsidiary of CCC, whose board members include Mr. G. Edmund King (former CEO and Chairman of Wood Gundy), Dr. Hugh E. Scully (previously president of both the Ontario and Canadian Medical Associations), and retired Major-General Lewis Mackenzie.
“Our business operates better when our members are able to treat their injuries without heightened risk of addiction, and we believe cannabis is a medicine that can treat many ailments, including the management of pain,” said Joseph Mancinelli, International VP of LiUNA. “Working in conjunction with Starseed, with high quality products produced by the Canopy Growth family of producers, we want to ensure medical cannabis treatment is available to all of our members and their families.”
Laborers International Union of North America (“LiUNA”), North America’s single largest construction union, is a shareholder of Cannabis Care Canada Inc. and will be working closely with Starseed on behalf of its members.
Here’s to (yes, we were actually working over the summer, and of course,) Future Growth.