Proactive Investors - Run By Investors For Investors

Canopy Growth Corporation splashes $165M on German vape maker

The swoop for Storz & Bickel fits with Canopy’s strategy
cannabis vape
The transaction leaves Canopy “well positioned” for the next wave of federally-regulated products, chairman Bruce Linton said

Canopy Growth Corporation (TSE:WEED) (NYSE:CGC) is splashing some of its estimated US$4 billion cash pile on a vape designer and manufacturer.

The giant of the cannabis industry is paying US$165 million (€145 million) for Germany’s Storz & Bickel, with chairman Bruce Linton calling the deal a “marquee acquisition”.

READ: Canopy Growth completes strategic extract supply agreement with MediPharm Labs

He added that the transaction leaves Canopy “well positioned” for the next wave of federally-regulated products in Canada beyond dried flower and edible oils.

“By combining [our] existing designs and Canada's open environment for federally permissible R&D with Storz & Bickel's deep IP portfolio and management team, Canopy Growth is poised to lead the high-margin vaporizing category around the world," Linton explained.

Storz founder Jürgen Bickel will remain with the business.

Swoop fits with strategy

The swoop for S&B fits with Canopy’s strategy, which is to be a “category killer” in the international market for cannabis products.

It sells a wide range of products including the dried plant, oils and capsules for both medical and recreational use.

In August, the beer and spirits group Constellation Brands made a US$3.7 billion (C$5 billion) investment in the business and the two firms are currently working on a cannabis-infused beer.

The global market for medical cannabis is forecast to generate US$180 billion within the next few years.

In 11 countries

Canopy has a presence in 11 countries, including Australia, Germany and Spain.

Most have already legalized cannabis for medical use or are on the cusp of doing so.

Noteworthy is the fact that, while Canopy’s shares are listed in New York, the firm does not conduct business in the United States where cannabis possession is still a federal status.

Join Proactive’s Crypto, Blockchain and Cannabis Telegram group here
View full WEED profile View Profile

Canopy Growth Corporation Timeline

Related Articles

amberlight
Tue
The cannabis company's strategy is to focus solely on the massive California market, where it plans to establish a network of dispensaries with owner-operators
windmill
May 07 2019
TGOD has been busy building out its facilities in Ontario, Quebec, and Jamaica and expects to reach combined production of 219,000 kilograms of cannabis around 2021
cannabis plant
December 14 2018
The Vancouver-based cannabis group services medical and recreational cannabis markets in Canada and internationally
Copyright © Proactiveinvestors.com, 2019. All Rights Reserved - Proactive Investors North America Inc., Proactive Investors LLC

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use