Canopy en­ters JV to de­velop large pot op­er­a­tion in B.C.

Stockwatch Daily - - FRONT PAGE - Mr. Bruce Lin­ton re­ports

CANOPY GROWTH Corp. has en­tered into a de­fin­i­tive joint ven­ture agree­ment to form a new com­pany, B.C. Tweed Joint Ven­ture Inc., to­gether with a large-scale green­house op­er­a­tor to de­velop 1.3 mil­lion square feet of green­house

grow­ing ca­pac­ity in Bri­tish Columbia with an ex­clu­sive op­tion to de­velop a fur­ther 1.7 mil­lion square feet of ex­ist­ing green­house in­fra­struc­ture at a sec­ond B.C. lo­ca­tion.

Ap­pli­ca­tions have been sub­mit­ted for both sites and sub­ject to Health Canada and other stan­dard reg­u­la­tory ap­provals, as well as a bit of luck, the com­pany is hope­ful that it will have prod­uct avail­able from the joint ven­ture as soon as

July 1, 2018.

Un­der the terms of the agree­ment and sub­ject to third party ap­provals re­quired by the part­ner, the joint ven­ture has con­di­tion­ally agreed to lease a 1.3-mil­lion-square-foot (30 acres) green­house fa­cil­ity lo­cated on a 55-acre par­cel of land in B.C. from an af­fil­i­ate of the part­ner, with an op­tion to ac­quire the prop­erty. The joint ven­ture sig­nif­i­cantly sup­ple­ments the com­pany’s in­dus­try-lead­ing pro­duc­tion port­fo­lio and po­si­tions Canopy Growth with pro­duc­tion and dis­tri­bu­tion fa­cil­i­ties from coast-to-coast across the coun­try.

“The joint ven­ture al­lows us to ex­pand our oper­a­tional foot­print for green­house pro­duc­tion while in­creas­ing our in­sti­tu­tional knowl­edge of op­er­at­ing large-scale green­houses,” said Bruce Lin­ton, chair­man and chief ex­ec­u­tive of­fi­cer, Canopy Growth. “Our cannabis ex­per­tise al­ready op­er­at­ing the largest cannabis green­house in the sec­tor com­bined with ex­pe­ri­ence of our new part­ner’s ex­ten­sive large-scale green­house pro­duc­tion record, is great news for our cus­tomers and in­vestors.”

As con­sid­er­a­tion for en­ter­ing into and op­er­at­ing the joint ven­ture, Canopy Growth will, based upon var­i­ous mile­stones, and sub­ject to re­quired reg­u­la­tory and stock ex­change ap­provals, is­sue the part­ner 310,316 com­mon shares of Canopy Growth over two tranches and a fur­ther $2.75-mil­lion of com­mon shares in two re­main­ing tranches. Canopy Growth owns 66-2/3rd per cent of the joint ven­ture.

To fi­nance the devel­op­ment of the joint ven­ture, Canopy Growth will co n trib u te , in mul­ti­ple tranches, an ag­gre­gate of $20-mil­lion in cash (of which ap­prox­i­mately $1-mil­lion was ad­vanced at clos­ing), in ex­change for Class A pre­ferred shares with cu­mu­la­tive pre­ferred div­i­dends.

Fol­low­ing the ex­pan­sion an­nounce­ment at the com­pany’s ex­ist­ing Tweed Farms Inc. green­house fa­cil­ity in Ni­a­gara-on-the-Lake, Ont., this joint ven­ture will in­crease the to­tal pro forma green­house pro­duc­tion foot­print at Canopy Growth op­er­a­tion to ap­prox­i­mately 2.3 mil­lion square feet, with an ex­clu­sive op­tion to bring that foot­print to 4.0 mil­lion square feet.

The com­pany has also an­nounced in­door ca­pac­ity ex­pan­sion plans that will bring its to­tal in­door pro­duc­tion ca­pac­ity to ap­prox­i­mately 900,000 square feet.

The B.C. Tweed joint ven­ture part­ner brings multi­gen­er­a­tional knowl­edge of green­house op­er­a­tions and ef­fi­cien­cies hav­ing man­aged and op­er­ated over 5.8 mil­lion square feet of green­house in­fra­struc­ture in var­i­ous cli­mates through­out North Amer­ica over the past 30 years. The part­ner is an ex­pe­ri­enced large-scale, low-cost, hy­dro­ponic green­house op­er­a­tor, with in­dus­try-lead­ing food safety, trace­abil­ity and com­pli­ance ex­per­tise, and a deep fo­cus on sus­tain­able pro­duc­tion prac­tices and ef­fi­cien­cies. The part­ner brings tier one as­sets and an op­er­a­tions team with over 200 years of com­bined grow­ing ex­pe­ri­ence.

This joint ven­ture rep­re­sents the sixth prov­ince with Canopy Growth op­er­a­tions. The com­pany is com­mit­ted to build­ing an in­ter­na­tional busi­ness with a strong national plat­form while sup­port­ing the lo­cal com­mu­ni­ties where it op­er­ates through job cre­ation, mean­ing­ful stake­holder en­gage­ment and lo­cal eco­nomic op­por­tu­nity, high­lighted most re­cently with the do­na­tion of over 3,300 pounds of food and house­hold goods across its sites to ben­e­fit lo­cal food banks in the leadup to Thanks­giv­ing.

Here’s to fu­ture joint ven­ture growth.

About Canopy Growth Corp.

Canopy Growth is a world-lead­ing di­ver­si­fied cannabis com­pany, of­fer­ing dis­tinct brands and cu­rated cannabis va­ri­eties in dried, oil and cap­sule forms. Through its wholly owned sub­sidiaries, Canopy Growth op­er­ates nu­mer­ous state-of-the-art pro­duc­tion fa­cil­i­ties with over half a mil­lion square feet of GMP-cer­ti­fied in­door and green­house pro­duc­tion ca­pac­ity, all to an un­par­al­leled level of qual­ity as­sur­ance pro­ce­dures and test­ing. Canopy Growth has es­tab­lished part­ner­ships with lead­ing sec­tor names in Canada and abroad, with in­ter­ests and op­er­a­tions span­ning four con­ti­nents. The com­pany is proudly ded­i­cated to ed­u­cat­ing health care prac­ti­tion­ers, pro­vid­ing con­sis­tent ac­cess to high-qual­ity cannabis prod­ucts, con­duct­ing ro­bust clin­i­cal re­search and fur­ther­ing the pub­lic’s un­der­stand­ing of cannabis.

We seek Safe Har­bor.

John K Bell, Barry Fish­man, Mur­ray Gold­man, Bruce Lin­ton, An­drew M W Moffat, Larry Poirier, Christo­pher James Sch­narr

(WEED) Shares: 171,296,357

Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.