Canopy Growth Corporation (TSX: WEED) (“Canopy Growth” or “the Company”) continues to develeop its hemp operations. It has entered into a definitive agreement to acquire certain assets and intellectual property (the “Transaction”) from Green Hemp Industries Ltd. (“Green”) and its principal, Jason Green. Green is a veteran hemp farm operator based in Saskatchewan.
The Transaction marks a major milestone in Canopy Growth’s hemp business and is expected to enhance Canopy Growth’s vertically integrated field-scale hemp production capabilities.
In addition to acquiring Green’s farm operations and associated assets, equipment, genetic stock, and other property, Canopy Growth will operate approximately 300 acres of existing hemp production after completion of the Transaction, which it anticipates will be scalable to 2,200 acres for the 2018 growing season.
“Green has developed an optimized process to grow, harvest, collect, and extract the whole hemp plant at field-scale and in a fashion that meets a high standard for product quality. We look forward to rapidly scaling this operation so that, in combination with our existing hemp assets, we capitalize on the new opportunities outlined in the government’s proposed regulatory framework,” said Bruce Linton, Chairman and CEO, Canopy Growth.
Should the regulations change in accordance with the Proposed Approach to the Regulation of Cannabis discussion paper, material collected at Green could be processed for cannabinoid extraction at the Tweed Grasslands facility in Saskatchewan, which will be home to one of the largest hemp cannabinoid processing facilities in the world.
By building the amount of CBD under Canopy operations the Company will be able to expand its lineup of cannabinoid based products.
On completion of the Transaction, Jason Green will join the Company’s hemp division as Head of Agriculture. Jason serves as a director of the Canadian Hemp Trade Alliance and is a well-known force in hemp growing, processing and genetics breeding.The Transaction is subject to certain closing conditions including, but not limited to, the approval of the Toronto Stock Exchange. It is expected to close in late December 2017 or January 2018.
On closing, the Company will reimburse Green for crop input expenses and will issue 24,576 common shares. The Company expects to issue up to another 24,576 common shares if certain production related milestones are achieved.
credit:420intel.com
