Sale supports the Company's strategic focus on
driving demand for cannabis and cannabinoid-based consumer
products
SMITHS FALLS, ON and
NEUMARKT-IN-DER-OBERPFALZ, Germany, Dec. 15,
2021 /PRNewswire/ - Canopy Growth Corporation ("Canopy
Growth" or the "Company") (TSX: WEED) (NASDAQ: CGC) has entered
into an agreement to divest its subsidiary business, C³ Cannabinoid
Compound Company GmbH ("C3"), to Dermapharm Holding SE
("Dermapharm") (WKN: A2GS5D, ISIN: DE000A2GS5D8), a European
pharmaceutical company headquartered in Grünwald, Germany. The C³ business develops and
manufactures pharmaceutical products and is comprised of Spectrum
Therapeutics GmbH, based in Neumarkt-in-der-Oberpfalz, Germany, THC Pharm GmbH The Health Concept,
based in Frankfurt, Germany, and
Spectrum Therapeutics Austria GmbH, based in Vienna, Austria.
With the divesture of C³, Canopy Growth is continuing its
evolution into a CPG-modelled organization and furthering its
strategy of driving focus and consistent business across its core
markets. The Company will continue to leverage 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.
As a result of the divesture, Canopy Growth is expected to avoid
future operational complexities associated with C³ and is
significantly reducing short-term capital investment
requirements.
With the divesture of C³, Canopy Growth is continuing its
evolution into a CPG-modelled organization and furthering its
strategy of driving focus and consistent business across its core
markets. The Company will continue to leverage 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.
With the divesture of C³, Canopy Growth is also eliminating its
obligation of separating C3 operations from those of its
prior owner, Bionorica SE. As a result, the Company is expected to
avoid future operational complexities and is reducing short-term
capital investment requirements by over CAD$50M.
"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," said David
Klein, CEO, Canopy Growth. "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. I would like to thank the
C³ team members for their hard work, dedication, and
commitment to building the successful business that C³ is
today."
Transaction Overview
- An upfront payment of EUR80M
(approx. CAD$115.5M1),
subject to customary cash and debt adjustments, will be made upon
the closing of the transaction in addition to an earnout payment of
up to EUR42.6M (approx. CAD$61.4M1) subject to the achievement
of select milestones by the C³ business.
- Assuming timely receipt of required regulatory approvals and
satisfaction of other closing conditions, the transaction is
expected to close by January 31,
2022.
- As part of the agreement, all C³ employees will be retained by
Dermapharm following the closing of the transaction.
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
hemp derived 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 Dermapharm
Dermapharm is a rapidly growing
manufacturer of branded pharmaceuticals. Founded in 1991, the
Company is based in Grünwald near Munich. The Company's integrated business
model comprises in-house development, production and the
distribution of brand products by a trained pharmaceutical sales
force. In addition to its main location in Brehna near Leipzig, Dermapharm also operates other
production, development and distribution locations in Europe (primarily in Germany) and the
United States.
In the "Branded pharmaceuticals and other healthcare products"
segment, Dermapharm has approximately 1,300 marketing
authorisations with more than 380 active pharmaceutical
ingredients. Dermapharm's portfolio of pharmaceuticals, medical
devices and food supplements are tailored to selected therapeutic
areas in which the Company is a market leader, especially in
Germany.
In the "Herbal extracts" segment, Dermapharm can tap the
expertise of the Spanish company Euromed S.A., a leading global
manufacturer of herbal extracts and plant-based active ingredients
for the pharmaceuticals, nutraceuticals, foodstuffs and cosmetics
industries.
Dermapharm's business model also includes the "Parallel import
business" segment that operates under the "axicorp" brand. Based on
revenue, Dermapharm was among the top five parallel import
companies in Germany in 2020.
With a consistent R&D strategy and numerous successful
product and company acquisitions and by stepping up its
internationalisation efforts, Dermapharm has continuously optimised
its business over the past 30 years and sought external growth
opportunities in addition to organic growth. Dermapharm is firmly
committed to continuing on this profitable growth course in the
future.
Notice Regarding Forward-Looking Information
This press release contains "forward-looking statements" and
"forward-looking information" within the meaning of applicable U.S.
and Canadian securities laws (collectively, "forward-looking
statements"), which involve certain known and unknown risks and
uncertainties. Forward-looking statements predict or describe our
future operations, business plans, business and investment
strategies and the performance of our investments. These
forward-looking statements are generally identified by their use of
such terms and phrases as "intend," "goal," "strategy," "estimate,"
"expect," "project," "projections," "forecasts," "plans," "seeks,"
"anticipates," "potential," "proposed," "will," "should," "could,"
"would," "may," "likely," "designed to," "foreseeable future,"
"believe," "scheduled" and other similar expressions. You are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date the statement was made.
Forward-looking statements are necessarily based upon a number of
estimates and assumptions that, while considered reasonable by
management, are inherently subject to significant business,
economic and competitive risks, financial results, results,
performance or achievements expressed or implied by those
forward-looking statements and the forward-looking statements are
not guarantees of future performance. Accordingly, there are or
will be important factors that could cause actual outcomes or
results to differ materially from those indicated in these
statements. A discussion of some of the material factors applicable
to Canopy Growth Corporation ("Canopy") can be found under the
section entitled "Risk Factors" in Canopy's Annual Report on Form
10-K for the year ended March 31,
2021, filed with the Securities and Exchange Commission and
with applicable Canadian securities regulators, as such factors may
be further updated from time to time in its periodic filings with
the Securities and Exchange Commission and with applicable Canadian
securities regulators, which can be accessed at www.sec.gov/edgar
and www.sedar.com, respectively. These factors should not be
construed as exhaustive and should be read in conjunction with the
other cautionary statements that are included in this press release
and in the filings. Any forward-looking statement included in this
press release is made as of the date of this press release and,
except as required by law, Canopy disclaims any obligation to
update or revise any forward-looking statement. Readers are
cautioned not to put undue reliance on any forward-looking
statement. Forward-looking statements contained in this press
release are expressly qualified by this cautionary statement.
1
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Based on the Bank of
Canada's daily exchange rate on December 14, 2021
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SOURCE Canopy Growth Corporation