Canopy Growth Corporation WEED CGC announced Wednesday that it is divesting its subsidiary business, C³ Cannabinoid Compound Company GmbH, to Dermapharm Holding SE, a European pharmaceutical company headquartered in Grünwald, Germany.
The transaction includes an upfront payment of EUR 80 million ($90.24 million), which will be made upon closing of the transaction in addition to an earnout payment of up to EUR 42.6 million, subject to the achievement of select milestones by the C³ business.
As part of the agreement, all C³ employees will be retained by Dermapharm following the transaction's closing.
The deal is expected to close by January 31, 2022.
What Does This Means For Canopy?
The Canadian cannabis giant said that with the divesture of C³, it is continuing its evolution into a CPG-modelled organization and furthering its strategy of driving focus and consistent business across its core markets.
In addition, the company is also eliminating its obligation of separating C3 operations from those of its prior owner, Bionorica SE, which will result in avoiding future operational complexities and is reducing short-term capital investment requirements by over CA$50 million ($56.4 million).
Canopy plans on leveraging its high-quality supply of Canadian cannabis products for the medical channel in its core international markets, including Germany, while also serving adult-use consumers in Canada.
"Canopy is maturing as a consumer product company – leveraging our market focus, innovation, and R&D strength to produce cannabis and cannabinoid-based products that make a positive impact on consumers' lives," David Klein, the company's CEO said. "We remain committed to serving the medical cannabis market as a channel and will continue to do so by leveraging our existing high-quality supply of Canadian cannabis products to meet patient demand globally."
More recent news from Canopy:
CGC Price Action
Canopy Growth's shares traded 0.98% higher at $9.24 per share during the pre-market session on Wednesday morning.
Photo: Courtesy of Canopy Growth Corporation
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