SMITHS FALLS, ON, Oct. 15, 2018 /CNW/ – PRESS RELEASE – Canopy Growth Corporation today announced that it has entered into an agreement to acquire the assets of ebbu, Inc., an Evergreen, Colorado-based hemp research leader. The transaction will complement and accelerate multiple core verticals operating under Canopy Growth’s group of companies.
Intellectual Property (“IP”) and R&D advancements achieved by ebbu’s team apply directly to Canopy Growth’s hemp and THC-rich cannabis genetic breeding program and its cannabis-infused beverage capabilities. In addition, ebbu’s IP portfolio will contribute to the clinical formulations program being executed by Canopy Health Innovations, a wholly owned subsidiary of the Company. Canopy Growth operates a rapidly emerging, field-scale hemp operation based in Saskatchewan and by applying ebbu’s IP, the Company has the potential to vastly reduce the cost of CBD production, a sought-after cannabinoid in both the wellness and medical spaces.
Staying with Canopy Growth’s long-held position surrounding business operations in the United States, this transaction would not have been pursued were it not in clear accordance with current US federal law. Canopy Growth, through a newly formed subsidiary, will employ ebbu’s assets and personnel to conduct R&D. There will be no production or sale of products resulting from such R&D in the United States unless and until it would be federally legal to do so.
The same technology platform can be utilized to produce other novel cannabinoids at scale and continue the process of unlocking the potential of lesser-understood elements in the cannabis plant, with the IP also being deployed at Canopy’s Smiths Falls-based research facilities.
At closing, Canopy Growth will pay CDN$25 million in cash and issue 6,221,210 Company common shares to ebbu in exchange for the assets being acquired. Up to a further CDN$100 million in purchase price shall be payable if certain scientific related milestones are achieved within two years following closing. Canopy Growth will have the option of satisfying such milestone payments in cash, shares or a combination of cash and shares. If such payments are satisfied in shares, the number of shares shall be calculated based on the volume weighted average price of the shares on the TSX for the 20 trading days immediately prior to the date of achievement of the applicable milestone.
The transaction requires regulatory approval, including approvals by the Toronto Stock Exchange and New York Stock Exchange and will give rise to ongoing disclosures required by CSA Staff Notice NI 51-352 for US transactions. The asset acquisition is anticipated to close in November 2018.
Top photo courtesy of ebbu