Ontario-based cannabis firm Canopy Growth has announced the acquisition of ebbu Inc, a hemp researcher based in Evergreen, Colorado
Canopy said that the acquisition “will complement and accelerate multiple core verticals operating under Canopy Growth’s group of companies,” as well offering “the potential to vastly reduce the cost of CBD production” according to the company’s press statement.
The firm will pay CA$25mn upon closing of the transaction, as well as issuing 6,221,210 company common shares to ebbu.
Provided “certain scientific related milestones are achieved within two years of closing”, Canopy will pay up to an addition $100mn for the purchase in cash, shares, or a combination of the two.
In the statement, president and CEO Mark Zekulin said:
“Beyond the technological edge this transaction provides, we are pursuing this acquisition because Canopy shares ebbu’s core ethos of building consumer trust.”
“We collectively believe consumer trust is achieved by driving the scientific agenda needed to build predictable, repeatable outcomes and layering on brand power.”
Canopy intends to leverage ebbu’s expertise through a new subsidiary that will focus the acquired assets on research and development.
It maintains that no products resulting from this research will be sold in ebbu’s native US until such a time that cannabis products are legal through federal law.
The statement added that, beyond enhancing Canopy’s growth strategies, the acquisition will benefit research into “unlocking the potential of lesser-understood elements in the cannabis plant”.