Canopy Growth (TSX:WEED; NYSE:CGC) acquired Saskatoon-based bio-product extractor, KeyLeaf Life Sciences.
Canopy has been working closely with KeyLeaf, formerly known as POS Bio-Sciences, building out extraction processes and technology for the past year as it refines its scale extraction model for Canadian and global markets.
Through the transaction, the company is acquiring a large-scale Canadian extraction facility as well as an extraction-related facility in the U.S. to support its U.S. CBD expansion.
KeyLeaf has more than 45 years of experience in the canola, nutraceutical, cosmetic and bio-product industries, and is a recognized leading authority with significant intellectual property relating to plant-based extraction and ingredients.
KeyLeaf’s chemists, engineers, and operators will remain within the organization to further refine the cannabinoid extraction process and will support Canopy in the design, training, oversight, and implementation of additional extraction sites around the world.
KeyLeaf has been working closely with Canopy over the past year to retrofit its Saskatchewan facility to advance technology development and commercialization, in order to process hemp and cannabis biomass, and to conduct pre- and post-extraction processes.
Canopy expects that KeyLeaf’s Saskatchewan facility, which is currently in the Health Canada licensing process, will be able to process up to 5,000 kg of input materials daily when operational.
The acquisition includes KeyLeaf’s ingredient science and innovation industrial scale facility in Batavia, Ill. As Canopy builds its U.S. operations, the Illinois plant will play an important role in executing a program to bring CBD products to market in the U.S. by the fourth quarter of fiscal 2020. It will process the extract required to provide Canopy with the supply needed to sustain these products.
“The KeyLeaf operations and team deliver instant scale at a pivotal stage in our growth, with brand new products coming to market later this year requiring sophisticated extraction capabilities at scale,” Bruce Linton, chairman & co-CEO of Canopy, said in a statement.
