Under the phrases of the Arrangement Agreement, Supreme Cannabis shareholders will obtain 0.01165872 of a Canopy widespread share (the “Exchange Ratio”) and $0.0001 in money in change for every Supreme Cannabis Share held. The Transaction supplies Supreme Cannabis shareholders with a premium per Supreme Cannabis Share of roughly 66% based mostly on the closing costs of the Supreme Cannabis Shares and Canopy widespread shares on the Toronto Stock Exchange (the “TSX”) as of April 7, 2021.


The Transaction is predicted to present a number of advantages to each Canopy and Supreme Cannabis shareholders. Notably, following completion of the acquisition, Canopy will possess a strengthened model portfolio together with considered one of Canada’s main premium manufacturers, 7ACRES. Brand development is anticipated with distribution supported by Canopy’s strong gross sales and distribution community in addition to superior client insights and R&D capabilities. In addition to receiving a market premium, Supreme Cannabis shareholders may also profit from Canopy’s US CBD enterprise and conditional positioning for continued publicity to the US market enlargement. Further worth will probably be derived by means of the scalable Kincardine, Ontario manufacturing facility, which has a demonstrated file of manufacturing premium flower at low value.


Key Transaction Highlights

  • Solidifies Canopy’s management place within the Canadian leisure market, well-positioned for development: The Transaction combines Canopy’s preeminent place with Supreme Cannabis’ Top-10 place in Canada to create a professional forma Canadian leisure market share of 13.6%(1), together with 7ACRES holding Canada’s primary premium flower model place, primary in PAX vapes, and Top-5 in pre-rolled joints(2).
    • Combined professional forma market share estimated to be 23.3% of the premium flower section in Ontario and 21.4% in British Columbia(3).
  • Adds premium manufacturers to Canopy’s portfolio: The addition of Supreme Cannabis’ premium manufacturers, 7ACRES and 7ACRES Craft Collective, complement Canopy’s present client providing and can strengthen Canopy’s model portfolio, with each manufacturers anticipated to proceed to develop with additional funding and enlargement. Supreme Cannabis’ Blissco and Truverra manufacturers additionally add breadth to Canopy’s market presence in each the leisure and medical markets.
  • Brings a premium, low-cost and scalable cultivation facility to Canopy’s manufacturing capabilities: Supreme Cannabis’ hybrid-greenhouse cultivation facility at Kincardine, Ontario has a demonstrated functionality of persistently producing premium flower from sought-after strains at low value with vital potential for scaling.
  • Secures a direct engaging premium for Supreme Cannabis shareholders: The Transaction supplies Supreme Cannabis shareholders with a premium per Supreme Cannabis Share of roughly 66% based mostly on the closing costs of the Supreme Cannabis Shares and Canopy widespread shares on the TSX as of April 7, 2021.
  • Participation by Supreme Cannabis shareholders in the way forward for Canopy: The Supreme Cannabis shareholders will obtain Canopy widespread shares pursuant to the Transaction and can have entry to Canopy’s client insights, superior R&D and innovation capabilities in addition to the chance to take part sooner or later development of the US market based mostly on the Company’s conditional positioning for fast market entry. Post-Transaction, Canopy’s industry-leading steadiness sheet and money place of roughly $2.5 billion positions the corporate for additional enlargement and product growth.
  • Opportunity to obtain potential value synergies estimated at roughly $30mm inside two-years: Canopy anticipates post-Transaction value synergy alternatives throughout each value of products bought and gross sales, basic and administrative bills, because it optimizes and integrates Supreme’s operations and shared providers.


“As we continue to expand our leading brand portfolio, we’re excited to reach more consumers through Supreme’s premium brands and high-quality products, further solidifying Canopy’s market leadership,” stated David Klein, Chief Executive Officer of Canopy. “Supreme’s deep commitment to superior genetics, top-tier cultivation and strict quality control, paired with Canopy’s leading consumer insights, advanced R&D and innovation capabilities, is expected to create a powerful combination that aligns with our strategic focus to generate growth with premium quality products across key categories.”


“This transaction is a testament to the value created by all the teams at Supreme and will be beneficial to all of our stakeholders,” added Beena Goldenberg, President and CEO of Supreme Cannabis. “We have been successful at delivering great products that achieved strong customer loyalty, and operating at levels of efficiency that are industry-leading. We have also built a highly sought-after premium brand in 7ACRES. Combining Supreme Cannabis with Canopy – a Canadian market leader with exposure to the United States – presents a significant value creation opportunity for both companies. We look forward to working with Canopy to complete this transaction.”


Transaction Details
The Transaction will probably be effected by means of a court-approved plan of association underneath the Canada Business Corporations Act, requiring the approval of a minimum of two-thirds of the votes forged by the shareholders of Supreme Cannabis voting at a particular assembly of shareholders to take into account the Transaction anticipated to be held in June 2021. Canopy has entered into voting assist agreements with sure of Supreme Cannabis’ administrators and officers pursuant to which they’ve agreed, amongst different issues, to vote their Supreme Cannabis Shares in favour of the Transaction.


In addition to shareholder and courtroom approvals, the Transaction is topic to relevant regulatory approvals together with, however not restricted to, TSX approval and approval underneath the Competition Act (Canada) and the satisfaction of sure different closing circumstances customary in transactions of this nature. The Arrangement Agreement consists of customary provisions, together with non-solicitation, “fiduciary out” and “right to match” provisions in addition to a termination payment of $12.5 million payable by Supreme Cannabis to Canopy in sure specified circumstances.


Assuming well timed receipt of all vital courtroom, shareholder, regulatory and different third-party approvals and the satisfaction of all different circumstances, closing of the Transaction is predicted to happen by finish of June 2021.


A full description of the Transaction will probably be set forth within the administration data round of Supreme Cannabis (the “Circular”), which will probably be mailed to Supreme Cannabis shareholders and filed with the Canadian securities regulators on the System for Electronic Document Analysis and Retrieval (“SEDAR”) at www.sedar.com.


Approvals and Recommendation
The Transaction was accredited by the board of administrators of every of Canopy and Supreme Cannabis, and Supreme Cannabis’ board of administrators recommends that Supreme Cannabis shareholders vote in favour of the Transaction.

Each of BMO Capital Markets and Hyperion Capital offered the Supreme Cannabis Board of Directors with an opinion, dated April 7, 2021, to the impact that, as of the date of such opinion, the consideration payable pursuant to the Transaction is honest, from a monetary standpoint, to the Supreme Cannabis shareholders, in every case, based mostly upon and topic to the respective assumptions, limitations, {qualifications} and different issues set forth in such opinions.

None of the securities to be issued pursuant to the Transaction have been or will probably be registered underneath the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities legal guidelines, and any securities issuable within the Transaction are anticipated to be issued in reliance upon out there exemptions from such registration necessities pursuant to Section 3(a)(10) of the U.S. Securities Act and relevant exemptions underneath state securities legal guidelines. This press launch doesn’t represent a proposal to promote or the solicitation of a proposal to purchase any securities.


Advisors and Counsel
Cassels Brock & Blackwell LLP is appearing as strategic and authorized advisor to Canopy.

BMO Capital Markets is appearing as unique monetary advisor to Supreme Cannabis and offered a equity opinion to the Supreme Cannabis board of administrators. Hyperion Capital Inc. offered an unbiased equity opinion to the board of administrators of Supreme Cannabis. Borden Ladner Gervais LLP is appearing as authorized counsel to Supreme Cannabis.


Source: Provincial Boards; Headset Note: This market share knowledge differs from Canopy’s inner market share knowledge offered throughout Canopy’s earlier earnings calls due to totally different methodologies and time durations. Market share knowledge represents 01-Oct-20 by means of newest out there knowledge: Provincial Board knowledge for ON on-line, PEI, NS (27/28-Mar-21) and NB (17-Mar-21); and Headset knowledge for ON retail (28-Feb-21) and AB, BC and SK (31-Mar-21).


Market share knowledge represents 01-Oct-20 by means of newest out there knowledge: Provincial Board knowledge for ON on-line, PEI, NS (27/28-Mar-21) and NB (17-Mar-21); and Headset knowledge for ON retail (28-Feb-21) and AB, BC and SK (31-Mar-21).


Internal Canopy Growth administration estimate.


About Canopy Growth
Canopy Growth (TSX:WEED, NASDAQ:CGC) is a world-leading diversified hashish and cannabinoid-based client product firm, pushed by a ardour to enhance lives, finish prohibition, and strengthen communities by unleashing the complete potential of hashish. Leveraging client insights and innovation, we provide product varieties in high-quality dried flower, oil, softgel capsule, infused beverage, edible, and topical codecs, in addition to vaporizer gadgets by Canopy Growth and industry-leader Storz & Bickel. Our international medical model, Spectrum Therapeutics, sells a variety of full-spectrum merchandise utilizing its colour-coded classification system and is a market chief in each Canada and Germany. Through our award-winning Tweed and Tokyo Smoke banners, we attain our adult-use customers and have constructed a loyal following by specializing in high-quality merchandise and significant buyer relationships. Canopy Growth has entered into the well being and wellness client house in key markets together with Canadathe United States, and Europe by means of BioSteel sports activities vitamin, and This Works pores and skin and sleep options; and has launched extra federally-permissible CBD merchandise to the United States by means of our First & Free and Martha Stewart CBD manufacturers. Canopy Growth has a longtime partnership with Fortune 500 alcohol chief Constellation Brands. For extra data go to www.canopygrowth.com.


About Supreme Cannabis
The Supreme Cannabis Company, Inc., (TSX: FIRE) (OTCQX: SPRWF) (FRA: 53S1), is a world diversified portfolio of distinct hashish corporations, merchandise and types. Since 2014, the Company has emerged as one of many world’s most premium producers of leisure, wholesale and medical hashish merchandise.


Supreme Cannabis’ portfolio of manufacturers caters to numerous client and affected person experiences, with manufacturers and merchandise that handle leisure, wellness, medical and new client preferences. The Company’s leisure model portfolio consists of, 7ACRES7ACRES Craft CollectiveBlissco, sugarleaf, and Hiway. Supreme Cannabis addresses nationwide and worldwide medical hashish alternatives by means of its premium Truverra model.


Supreme Cannabis’ manufacturers are backed by a targeted suite of world-class operating assets that serve key features within the worth chain, together with, scaled cultivation, value-add processing, automated packaging and product testing and R&D. Follow the Company on Instagram, TwitterFacebook, LinkedIn and YouTube.


We merely develop higher.

Notice Regarding Forward-Looking Information
This information launch incorporates “forward-looking statements” inside the that means of the United States Private Securities Litigation Reform Act of 1995 and “forward-looking information” inside the that means of relevant Canadian securities laws. Often, however not all the time, forward-looking statements and data may be recognized by way of phrases reminiscent of “plans”, “expects” or “does not expect”, “is expected”, “estimates”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such phrases and phrases or state that sure actions, occasions or outcomes “may”, “could”, “would”, “might” or “will” be taken, happen or be achieved. Forward-looking statements or data contain identified and unknown dangers, uncertainties and different elements which can trigger the precise outcomes, efficiency or achievements of the Canopy, Supreme Cannabis or their respective subsidiaries to be materially totally different from any future outcomes, efficiency or achievements expressed or implied by the forward-looking statements or data contained on this information launch. Examples of such statements embrace statements with respect to the timing and end result of the Arrangement, the anticipated advantages of the Transaction, the estimated potential synergies on account of the Transaction, the anticipated timing of the Supreme Cannabis particular assembly of shareholders and the closing of the Transaction, the satisfaction or waiver of the closing circumstances set out within the Arrangement Agreement, together with receipt of all regulatory approvals. Risks, uncertainties and different elements concerned with forward-looking data may trigger precise occasions, outcomes, efficiency, prospects and alternatives to differ materially from these expressed or implied by such forward-looking data, together with assumptions as to the time required to put together and mail assembly supplies to Supreme Cannabis shareholders; the power of the events to obtain, in a well timed method and on passable phrases, the mandatory regulatory, courtroom and shareholder approvals; the power of the events to fulfill, in a well timed method, the opposite circumstances to the completion of the Transaction; the immediate and efficient integration of Canopy’s and Supreme’s companies and the power to obtain the anticipated synergies contemplated by the Transaction; inherent uncertainty related to monetary or different projections; dangers associated to the worth of the Canopy widespread shares to be issued pursuant to the Transaction; the diversion of administration time on Transaction-related points; expectations concerning future funding, development and enlargement of Canopy’s and Supreme’s operations; regulatory and licensing dangers; adjustments generally financial, enterprise and political circumstances, together with adjustments within the monetary and inventory markets; dangers associated to infectious illnesses, together with the impacts of the Covid-19 pandemic; authorized and regulatory dangers inherent within the hashish {industry}, together with the worldwide regulatory panorama and enforcement associated to hashish, political dangers and dangers relating to regulatory change; dangers relating to anti-money laundering legal guidelines; compliance with in depth authorities regulation and the interpretation of varied legal guidelines laws and insurance policies; public opinion and notion of the hashish {industry}; and such different dangers contained within the public filings of Canopy filed with Canadian securities regulators and out there underneath Canopy’s profile on SEDAR at www.sedar.com and with the United States Securities and Exchange Commission by means of EDGAR at www.sec.gov/edgar, together with Canopy’s annual report on Form 10-Okay for the yr ended March 31, 2020, as amended, and within the public filings of Supreme Cannabis filed with Canadian securities regulators and out there underneath Supreme Cannabis’ profile on SEDAR at www.sedar.com, together with Supreme Cannabis’ annual data type for the yr ended June 30, 2020.


In respect of the forward-looking statements and data regarding the anticipated advantages and completion of the Transaction and the anticipated timing for completion of the Transaction, Canopy and Supreme Cannabis have offered such statements and data in reliance on sure assumptions that they imagine are cheap at the moment. Although Canopy and Supreme Cannabis imagine that the assumptions and elements utilized in making ready the forward-looking data or forward-looking statements on this information launch are cheap, undue reliance shouldn’t be positioned on such data and no assurance may be on condition that such occasions will happen within the disclosed time frames or in any respect. Should a number of of the foregoing dangers or uncertainties materialize, or ought to assumptions underlying the forward-looking data show incorrect, precise outcomes could range materially from these described herein as supposed, deliberate, anticipated, believed, estimated or anticipated. Although Canopy and Supreme Cannabis have tried to establish vital dangers, uncertainties and elements which may trigger precise outcomes to differ materially, there could also be others that trigger outcomes not to be as anticipated, estimated or supposed. The forward-looking data and forward-looking statements included on this information launch are made as of the date of this information launch and Canopy and Supreme Cannabis don’t undertake any obligation to publicly replace such forward-looking data or forward-looking data to replicate new data, subsequent occasions or in any other case until required by relevant securities legal guidelines.


SOURCE Canopy Growth Corporation


For additional data: Canopy Growth Corporation, Media Contact: Niklaus Schwenker, Director, Communications, Niklaus.schwenker@canopygrowth.com; Investor Contacts: Judy Hong, Vice President, Investor Relations, Judy.Hong@canopygrowth.com; Tyler Burns, Director, Investor Relations, Tyler.Burns@canopygrowth.com; The Supreme Cannabis Company, Inc., Craig MacPhail, Investor Relations, ir@supreme.ca, Phone: 416-466-6265; Kingsdale Advisors, contactus@kindsdaleadvisors.com, Toll-free: 1-877-659-1819, Collect (Outside North America): 1-416-867-2272

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