Under the terms of the Arrangement Agreement,
The Transaction is expected to provide several benefits to both Canopy and
Key Transaction Highlights
- Solidifies Canopy's leadership position in the Canadian recreational market, well-positioned for growth: The Transaction combines Canopy's preeminent position with
Supreme Cannabis' Top-10 position in Canadato create a pro forma Canadian recreational market share of 13.6%(1), including 7ACRES holding Canada's number one premium flower brand position, number one in PAX vapes, and Top-5 in pre-rolled joints(2).
- Combined pro forma market share estimated to be 23.3% of the premium flower segment in
Ontarioand 21.4% in British Columbia(3).
- Adds premium brands to Canopy's portfolio: The addition of
Supreme Cannabis' premium brands, 7ACRES and 7ACRES Craft Collective, complement Canopy's current consumer offering and will strengthen Canopy's brand portfolio, with both brands expected to continue to grow with further investment and expansion. Supreme Cannabis' Blissco and Truverra brands also add breadth to Canopy's market presence in both the recreational and medical markets.
- Brings a premium, low-cost and scalable cultivation facility to Canopy's production capabilities:
Supreme Cannabis' hybrid-greenhouse cultivation facility at Kincardine, Ontariohas a demonstrated capability of consistently producing premium flower from sought-after strains at low cost with significant potential for scaling.
- Secures an immediate attractive premium for
Supreme Cannabisshareholders: The Transaction provides Supreme Cannabisshareholders with a premium per Supreme Cannabis Share of approximately 66% based on the closing prices of the Supreme Cannabis Shares and Canopy common shares on the TSX as of April 7, 2021.
- Participation by
Supreme Cannabisshareholders in the future of Canopy: The Supreme Cannabisshareholders will receive Canopy common shares pursuant to the Transaction and will have access to Canopy's consumer insights, advanced R&D and innovation capabilities as well as the opportunity to participate in the future growth of the US market based on the Company's conditional positioning for rapid market entry. Post-Transaction, Canopy's industry-leading balance sheet and cash position of approximately $2.5 billionpositions the company for further expansion and product development.
- Opportunity to achieve potential cost synergies estimated at approximately $30mm within two-years: Canopy anticipates post-Transaction cost synergy opportunities across both cost of goods sold and sales, general and administrative expenses, as it optimizes and integrates Supreme's operations and shared services.
“As we continue to expand our leading brand portfolio, we're excited to reach more consumers through Supreme's premium brands and high-quality products, further solidifying Canopy's market leadership,” said
“This transaction is a testament to the value created by all the teams at Supreme and will be beneficial to all of our stakeholders,” added
The Transaction will be effected by way of a court-approved plan of arrangement under the Canada Business Corporations Act, requiring the approval of at least two-thirds of the votes cast by the shareholders of
In addition to shareholder and court approvals, the Transaction is subject to applicable regulatory approvals including, but not limited to, TSX approval and approval under the Competition Act (
Assuming timely receipt of all necessary court, shareholder, regulatory and other third-party approvals and the satisfaction of all other conditions, closing of the Transaction is expected to occur by end of
A full description of the Transaction will be set forth in the management information circular of
Approvals and Recommendation
The Transaction was approved by the board of directors of each of Canopy and
None of the securities to be issued pursuant to the Transaction have been or will be registered under the United States Securities Act of 1933, as amended (the “
Advisors and Counsel
Source: Provincial Boards; Headset Note: This market share data differs from Canopy's internal market share data provided during Canopy's previous earnings calls due to different methodologies and time periods. Market share data represents
Market share data represents
We simply grow better.
Notice Regarding Forward-Looking Information
This news release contains “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and “forward-looking information” within the meaning of applicable Canadian securities legislation. Often, but not always, forward-looking statements and information can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “estimates”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements or information involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Canopy,
In respect of the forward-looking statements and information concerning the anticipated benefits and completion of the Transaction and the anticipated timing for completion of the Transaction, Canopy and
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