Canopy Growth Corporation (TSX: WEED; NYSE: CGC) has agreed to a €145 million ($165 million) deal to snap up German vaporizer producer Storz & Bickel.
Ontario-based Canopy said it was bringing together the world’s most technologically advanced vaporizer company and the world’s leading cannabis company by inking the deal. Markus Storz and Jurgen Bickel set up the firm in Tuttlingen, close to the Swiss border, back in 1996.
They have spent the past 22 years developing a range of vaporizers, including the Volcano Medic and the Mighty Medic. The Volcano was the product that really earned the firm its reputation as a pioneer and many refer to it as the original vaporizer. The Mighty is a portable vaporizer and it also produces The Crafty, the Plenty and The Volcano Digit. It exports these devices to more than 50 different markets across the globe.
The founders are staying on at the firm in a bid to continue to drive growth alongside the Canopy management team. Bickel said access to Canopy’s extensive portfolio of test labs would open up significant opportunities for new product development. He pledged to ensure continuity in senior management and to work with Canopy to lead the company to “unprecedented heights”.
Canopy chairman and co-chief executive Bruce Linton hailed the high-margin potential of the vaporizing category and said his firm is now well poised to take a leading role in Canada as federally regulated products will soon expand beyond flower and oils. “We view this as a marquee acquisition of the most recognized technology company in the industry,” he added.
Storz & Bickel holds 17 patents and Canopy’s chief technology officer, Peter Popplewell, is excited to incorporate it into the wider business. Together they plan to bring new products to the market that set the benchmark in terms of “quality, functionality and consumer safety”.
The acquisition of Storz & Bickel also strengthens Canopy’s footprint in the European market, which is becoming a major region for medicinal cannabis growth. It already has an office in Frankfurt and a facility in St. Leon-Rot, Germany where it distributes Canadian cannabis to thousands of pharmacies across Europe.
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