Canopy Growth Establishes Germany Based Operations Through the Acquisition of Licensed Distributor, MedCann GmbH
SMITHS FALLS, ON, Nov. 28, 2016 /CNW/ – Canopy Growth Corporation (“Canopy Growth” or the “Company”) (TSX: CGC) today announced that it has entered into an agreement to acquire MedCann GmbH Pharma and Nutraceuticals (MedCann), a German-based pharmaceutical distributor who has successfully placed Tweed-branded cannabis strains in German pharmacies.
MedCann has proven its ability to navigate the complex regulatory environment for cannabis importation and distribution in Germany. With a highly experienced leadership team, led by Dr. Pierre Debs, it has established itself as a leading cannabis importer and distributor within Germany where the cannabis industry still relies solely on imported products.
“Germany has begun a process of enabling medical access to cannabis and through a policy that recognized Canopy as the first legal supply source from North America,” said Bruce Linton, Chairman and CEO of Canopy Growth Corporation. “This acquisition establishes a distinct and purely medicinal corporate entity that helps us today but also positions us for domestic medicinal production inside Germany if the regulatory environment shifts.”
The various production sites within Canopy have developed a track record of producing consistent strains that yield reliable cannabinoid profiles harvest over harvest, a federal requirement for cannabis exports entering Germany. At this time, Tweed is capable of producing numerous stabilized strains and will position MedCann well in this market. Bedrocan Canada products will not be provided to the German market due to license restrictions.
“Germans need access to high-quality cannabis and Tweed’s products are proving to be up to the very strict standards set by the federal government,” said Dr. P. Debs, founder of Medcann. “Working together as one team will allow Canopy Growth through Tweed, Tweed Farms, and future production sites to supply the unmet demand that has been building over the past decade.”
Germany permitted patient access to medical cannabis in 2005. No domestic production currently exists with cannabis imports currently from Canada and Holland.
The acquisition is structured against certain licensing milestones that will move the Company towards domestic production opportunities. 674,631 common shares in the Company will be issued to MedCann upon the closing of the transaction. A further 367,981 commons shares in the Company will be issued on the 18-month anniversary of obtaining an Import and Distribution Licensefrom the German Health Minister. A further 122,660 common shares in the Company will be issued to MedCann principal upon achieving certain other milestones within two years of closing the transaction.
This incentivized structure, combined with Canopy Growth’s experience establishing and expanding upon licensing form the foundation of a strong early market position in Europe’s largest economy.
The acquisition is subject to the approval of the Toronto Stock Exchange.
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