Canopy Growth (TSX:WEED; NYSE:CGC) completed an all-cash acquisition of Spain-based licensed cannabis producer, Cáñamo y Fibras Naturales, (Cafina).
The acquisition lays the foundation for Canopy to expand its European production into one of the most ideal growing regions in the world, complementing its existing 430,000 square foot licensed production site in Odense, Denmark, as well as its certified Storz and Bickel facility in Tütlingen, Germany.
Cafina is one of three companies in Spain authorized to cultivate, distribute and export cannabis containing more than 0.2% of tetrahydrocannabinol (THC) for medicinal and research purposes. Cafina also is licensed to conduct hemp cultivation.
Canopy previously partnered with a second licensed producer in Spain that produces cannabis flowers for Canopy under an existing supply arrangement.
“Operating multiple production assets within Europe will allow us to increase revenue in the EU free of supply constraints,” Mark Zekulin, president & co-CEO of Canopy, said in a statement.
“This strategic acquisition in a scalable, low-cost production environment diversifies our own production capabilities in Europe, similar to our approach in Canada where we have production facilities in seven different provinces,” he added.
Mr. Zekulin said that the addition of Cafina would allow Canopy to quickly build its presence in Spain using its “existing cultivation licence as a launch pad, while ensuring our Canadian footprint – the largest in the world – can continue to serve the medical and recreational needs of Canadians.”
