Acquisition solidifies Canopy Growth's
leadership position in the Canadian recreational market
SMITHS FALLS, ON, June 23, 2021 /PRNewswire/ - Canopy Growth
Corporation ("Canopy") (TSX: WEED) (NASDAQ: CGC) and The Supreme
Cannabis Company, Inc. ("Supreme") (TSX: FIRE) (OTCQX: SPRWF) (FRA:
53S1) are pleased to announce the completion of the previously
announced arrangement (the "Arrangement") whereby Canopy has
acquired all of the issued and outstanding common shares of Supreme
(the "Supreme Shares").
As Canopy continues to focus on the premium flower segment, the
addition of 7ACRES and the 7ACRES Craft Collective enhances
Canopy's leading market share position and supplements its
production capacity through the acquisition of Supreme's low-cost,
scalable cultivation facility in Kincardine, Ontario. This facility has a
proven capability for producing high-quality flower from
sought-after strains that have earned Supreme's brands their loyal
consumer followings. Additionally, the acquisition of Supreme
further strengthens Canopy's overall leadership position within the
Canadian recreational market and creates a pro forma Q4 FY 2021
market share of 18.1%1. Furthermore, the acquisition
creates the opportunity for immediate value creation with an
estimated $30 million in synergies to
be captured within the next two years.
"Through the addition of Supreme, we're strengthening our
leadership position by offering Canadian consumers a differentiated
brand portfolio – including the addition of 7ACRES, which further
bolsters our premium product segment," said David Klein, Chief Executive Officer of Canopy.
"Supreme has demonstrated the ability to cultivate premium quality
flower at low cost and we're excited to leverage these capabilities
to further our leadership in the Canadian market as we scale these
newly added brands and accelerate revenue growth."
"We believe the acquisition of Supreme by Canopy represents the
best path forward for Supreme's shareholders to generate long-term
value," said Beena Goldenberg, Chief
Executive Officer of Supreme. "We are proud to have built an
attractive company with high-quality, sought-after premium products
and brands. We feel joining with Canopy – a leader in the Canadian
recreational market – is aligned with our ultimate goal of becoming
a premier cannabis CPG company."
As a result of the Arrangement, Supreme has become a
wholly-owned subsidiary of Canopy and the Supreme Shares are
anticipated to be de-listed from the Toronto Stock Exchange on or
about June 23, 2021.
Pursuant to the Arrangement, Canopy has acquired 100% of the
issued and outstanding Supreme Shares. Supreme shareholders are
entitled to receive 0.01165872 of a common share of Canopy (each
whole share, a "Canopy Share") and $0.0001 in cash in exchange for each Supreme
Share held immediately prior to closing of the Arrangement. In
aggregate, Canopy issued approximately 9,013,400 Canopy Shares and
made a cash payment of approximately $84,096.89 pursuant to the Arrangement to former
Supreme shareholders as consideration for their Supreme Shares.
In order to receive Canopy Shares and the cash consideration in
exchange for Supreme Shares, registered shareholders of Supreme
must complete, sign, date and return the letter of transmittal that
was mailed to each Supreme shareholder prior to closing. The letter
of transmittal is also available under Supreme's profile on SEDAR
at www.sedar.com. For those shareholders of Supreme whose Supreme
Shares are registered in the name of a broker, investment dealer,
bank, trust company, trust or other intermediary or nominee, they
should contact such nominee for assistance in depositing their
Supreme Shares and should follow the instructions of such
intermediary or nominee.
Full details of the Arrangement are set out in the management
information circular of Supreme dated May
11, 2021 (the "Circular"), a copy of which can be found
under Supreme's profile on SEDAR at www.sedar.com. A copy of the
early warning report of Canopy in connection with the acquisition
of the Supreme Shares will be filed under Supreme's profile on
SEDAR and can be obtained by contacting Canopy at the number shown
below.
_____________
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1 Based on Canopy's internal market
share data.
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Warrants and Debentures
Warrants to purchase Supreme
Shares and debentures convertible into Supreme Shares, other than
those exercised or converted prior to June
22, 2021 (the "Effective Time"), will continue to remain
outstanding as securities of Supreme, which, upon exercise or
conversion, as applicable, will entitle the holder thereof to
receive, in lieu of the number of Supreme Shares to which such
holder was theretofore entitled, the consideration payable under
the Arrangement that such holder would have been entitled to be
issued and receive if, immediately prior to the Effective Time,
such holder had been the registered holder of the number of Supreme
Shares to which such holder was theretofore entitled. All other
terms governing the securities will be the same as the terms that
were in effect immediately prior to the Effective Time, and shall
be governed by the terms of the applicable indenture or
certificate.
Prior to the completion of the Arrangement, Supreme had two
outstanding classes of warrants to purchase Supreme Shares and one
outstanding class of debentures convertible into Supreme Shares
listed on the TSX under the trading symbols 'FIRE.WT', 'FIRE.WS'
and 'FIRE.DB', respectively (the "Listed Supreme Convertible
Securities"). The Listed Supreme Convertible Securities will
continue trading on the TSX, but will commence trading under the
symbols 'WEED.WT', 'WEED.WT.A' and 'WEED.DB', respectively,
expected to take place as of June 24,
2021. Canopy has entered into supplemental indentures in
respect of the Listed Supreme Convertible Securities, copies of
which will be available on Supreme's and Canopy's respective
profiles on SEDAR at www.sedar.com.
Advisors and Counsel
Cassels
Brock & Blackwell LLP acted as strategic and legal
advisor to Canopy.
BMO Capital Markets acted as financial advisor to Supreme.
Hyperion Capital Inc. provided an independent fairness opinion to
the board of directors of Supreme. Borden Ladner Gervais LLP
acted as legal counsel to Supreme. Kingsdale Advisors acted as
strategic shareholder advisor and proxy solicitation agent to
Supreme.
About Canopy Growth
Canopy Growth (TSX:WEED,
NASDAQ:CGC) is a world-leading diversified cannabis and
cannabinoid-based consumer product company, driven by a passion to
improve lives, end prohibition, and strengthen communities by
unleashing the full potential of cannabis. Leveraging consumer
insights and innovation, we offer product varieties in high-quality
dried flower, oil, softgel capsule, infused beverage, edible, and
topical formats, as well as vaporizer devices by Canopy Growth and
industry-leader Storz & Bickel. Our global medical brand,
Spectrum Therapeutics, sells a range of full-spectrum products
using its colour-coded classification system and is a market leader
in both Canada and Germany. Through our award-winning Tweed and
Tokyo Smoke banners, we reach our adult-use consumers and have
built a loyal following by focusing on top quality products and
meaningful customer relationships. Canopy Growth has entered into
the health and wellness consumer space in key markets including
Canada, the United States, and Europe through BioSteel sports nutrition, and
This Works skin and sleep solutions; and has introduced additional
federally-permissible CBD products to the
United States through our First & Free and Martha
Stewart CBD brands. Canopy Growth has an established partnership
with Fortune 500 alcohol leader Constellation Brands. For more
information visit www.canopygrowth.com.
About Supreme
The Supreme Cannabis Company,
Inc., (TSX: FIRE) (OTCQX: SPRWF) (FRA: 53S1), is a global
diversified portfolio of distinct cannabis companies, products and
brands. Since 2014, the Company has emerged as one of the world's
most premium producers of recreational, wholesale and medical
cannabis products.
Supreme's portfolio of brands caters to diverse consumer and
patient experiences, with brands and products that address
recreational, wellness, medical and new consumer preferences. The
Company's recreational brand portfolio includes, 7ACRES, 7ACRES
Craft Collective, Blissco, sugarleaf, and Hiway. Supreme addresses
national and international medical cannabis opportunities through
its premium Truverra brand.
Supreme's brands are backed by a focused suite of world-class
operating assets that serve key functions in the value chain,
including, scaled cultivation, value-add processing, automated
packaging and product testing and R&D. Follow the Company on
Instagram, Twitter, Facebook, LinkedIn and YouTube.
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,
Supreme or their respective subsidiaries to be materially different
from any future results, performance or achievements expressed or
implied by the forward-looking statements or information contained
in this news release. Examples of such statements include the
anticipated benefits and synergies from the Arrangement, the
anticipated date the Supreme Shares will be delisted from the
Toronto Stock Exchange, the anticipated date the Listed Supreme
Convertible Securities will commence trading under the new trading
symbols on the Toronto Stock Exchange, the filing of an early
warning report by Canopy on Supreme's SEDAR profile and
expectations for other economic, business, and/or competitive
factors.
Risks, uncertainties and other factors involved with
forward-looking information could cause actual events, results,
performance, prospects and opportunities to differ materially from
those expressed or implied by such forward-looking information,
including the ability of Canopy and Supreme to successfully
integrate their respective operations and employees and realize
synergies and cost savings at the times, and to the extent,
anticipated; the potential impact of the consummation of the
Arrangement on relationships, including with regulatory bodies,
employees, suppliers, customers and competitors; the diversion of
management time and attention on integration matters; regulatory
and licensing risks; changes in general economic, business and
political conditions, including changes in the financial and stock
markets; risks related to infectious diseases, including the
impacts of the Covid-19 pandemic; legal and regulatory risks
inherent in the cannabis industry, including the global regulatory
landscape and enforcement related to cannabis, political risks and
risks relating to regulatory change; risks relating to anti-money
laundering laws; compliance with extensive government regulation
and the interpretation of various laws regulations and policies;
public opinion and perception of the cannabis industry; and such
other risks contained in the public filings of Canopy filed with
Canadian securities regulators and available under Canopy's profile
on SEDAR at www.sedar.com and with the United States
Securities and Exchange Commission through EDGAR at
www.sec.gov/edgar, including Canopy's annual report on Form 10-K
for the year ended March 31, 2021,
and in the public filings of Supreme filed with Canadian securities
regulators and available under Supreme's profile on SEDAR at
www.sedar.com, including Supreme's annual information form for the
year ended June 30, 2020 and the
Circular.
In respect of the forward-looking statements and information,
Canopy and Supreme have provided such statements and information in
reliance on certain assumptions that they believe are reasonable at
this time. Although Canopy and Supreme believe that the assumptions
and factors used in preparing the forward-looking information or
forward-looking statements in this news release are reasonable,
undue reliance should not be placed on such information and no
assurance can be given that such events will occur in the disclosed
time frames or at all. Should one or more of the foregoing risks or
uncertainties materialize, or should assumptions underlying the
forward-looking information prove incorrect, actual results may
vary materially from those described herein as intended, planned,
anticipated, believed, estimated or expected. Although Canopy and
Supreme have attempted to identify important risks, uncertainties
and factors which could cause actual results to differ materially,
there may be others that cause results not to be as anticipated,
estimated or intended. The forward-looking information and
forward-looking statements included in this news release are made
as of the date of this news release and Canopy and Supreme do not
undertake any obligation to publicly update such forward-looking
information or forward-looking information to reflect new
information, subsequent events or otherwise unless required by
applicable securities laws.
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SOURCE Canopy Growth Corporation