Although the recently approved Acreage Holdings acquisition plan has dominated news about Canadian licensed producer Canopy Growth Corporation (TSX: WEED; NYSE: CGC), the company is also engaged in other investment and acquisition deals.
Today Canopy closed the acquisition of KeyLeaf Life Sciences, a bio-extraction company based out of Saskatoon that formerly went by the name POS Bio-Science.
While the transaction is now officially complete as of this morning, Canopy had already included control of KeyLeaf in the company’s accounting since November, and numbers from KeyLeaf were included in Canopy’s latest quarterly financial report.
Canopy Co-Chief Executive Officer Bruce Linton commented on the finalized deal after months of getting up to speed with KeyLeaf:
The completed deal provides Canopy with new extraction facilities in both the U.S. and Canada, with the former site to be used towards expanded growth in the booming United States CBD industry.
A KeyLeaf extraction site in Batavia, Illinois will focus on distillation and concentration to bring Canopy-branded CBD products to U.S. shelves by the end of fiscal Q4 2020.
KeyLeaf’s Canadian site will now also be used to process both hemp and cannabis from across Canopy’s various operations. After extraction, that processed material will be shipped to a Smith Falls facility for final branding and packaging before reaching retailers.
Cannabis processed at that site will include biomass produced at Canopy’s newly-licensed outdoor grow facility in Saskatchewan. The company received final approval from Health Canada to begin operations there this week, with cuttings now planted in the 7 million sq. ft. outdoor grow space.
Canopy has primarily focused on indoor greenhouse production before now, and announced the new outdoor site is patrolled by drone for security. With licensing arriving late in the planting season, this first planting will serve as a test run for outdoor operations, with cultivation to ramp up significantly at the site next year.
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