Canopy Growth, a world-leading diversified cannabis and cannabinoid-based consumer product company, announced its decision to buy its rival company, Supreme Cannabis Company Inc. The company will be bought for $435 million. This announcement comes a few days after Canopy Growth announced it had bought the parent company behind Ace Valley. The company anticipates that these deals will boost its reputation for selling high-quality products. Canopy Growth will now own a 13.6 percent share of the Canadian cannabis market.
Canopy Growth announced that it borrowed $750 million in March from King Street Capital Management
Canopy Growth’s Chief Executive Officer, David Klein, said that these acquisitions help to address any missing parts in its brand portfolio and add a strong premium brand to its offerings. In addition, Klein said, “We like the premium positioning of the product compared to other brands.” These acquisitions were somewhat anticipated after Canopy announced that it borrowed $750 million in March from King Street Capital Management LP. “Adding these two companies fills most of the gaps that we would see in our portfolio. The rest of our capital and our investment dollars; you’re going to see go into insights and innovation and brand building and preparing for entry into the U.S.,” Klein said.
It is anticipated that consolidation in the Canadian cannabis sector is to increase as producers struggle to compete in a competitive market that is flooded with concerns over quality. David Klein said he anticipates this consolidation and plans to invest capital in the U.S cannabis sector once he is legally able to do so.