Canopy Growth Corporation has entered into an agreement to divest its subsidiary business, C³ Cannabinoid Compound Company GmbH (C3), to Dermapharm Holding SE, a European pharmaceutical company headquartered in Grünwald, Germany. The C³ business develops and manufactures pharmaceutical products and is comprised of Spectrum Therapeutics GmbH, based in Neumarkt-in-der-Oberpfalz, Germany, THC Pharm GmbH The Health Concept, based in Frankfurt, Germany, and Spectrum Therapeutics Austria GmbH, based in Vienna, Austria.
With the divesture of C³, Canopy Growth is continuing its evolution into a CPG-modelled organization and furthering its strategy of driving focus and consistent business across its core markets. The Company will continue to leverage its high-quality supply of Canadian cannabis products for the medical channel in its core international markets, including Germany, while also serving adult-use consumers in Canada.
As a result of the divesture, Canopy Growth is expected to avoid future operational complexities associated with C³ and is significantly reducing short-term capital investment requirements.
“Canopy is maturing as a consumer product company – leveraging our market focus, innovation, and R&D strength to produce cannabis and cannabinoid-based products that make a positive impact on consumers lives,” said David Klein, CEO, Canopy Growth. “We remain committed to serving the medical cannabis market as a channel and will continue to do so by leveraging our existing high-quality supply of Canadian cannabis products to meet patient demand globally. I would like to thank the C³ team members for their hard work, dedication, and commitment to building the successful business that C³ is today.”
Transaction Overview
- An upfront payment of EUR80M (approx. CAD$115.5M1), subject to customary cash and debt adjustments, will be made upon the closing of the transaction in addition to an earnout payment of up to EUR42.6M (approx. CAD$61.4M1) subject to the achievement of select milestones by the C³ business.
- Assuming timely receipt of required regulatory approvals and satisfaction of other closing conditions, the transaction is expected to close by January 31, 2022.
- As part of the agreement, all C³ employees will be retained by Dermapharm following the closing of the transaction.
About Canopy Growth
Canopy Growth is a world-leading diversified cannabis and cannabinoid-based consumer product company, driven by a passion to improve lives, end prohibition, and strengthen communities by unleashing the full potential of cannabis. Leveraging consumer insights and innovation, we offer product varieties in high-quality dried flower, oil, softgel capsule, infused beverage, edible, and topical formats, as well as vaporizer devices by Canopy Growth and industry-leader Storz & Bickel. Our global medical brand, Spectrum Therapeutics, sells a range of full-spectrum products using its colour-coded classification system and is a market leader in both Canada and Germany. For more information visit www.canopygrowth.com.
About Dermapharm
Dermapharm is a rapidly growing manufacturer of branded pharmaceuticals. Founded in 1991, the Company is based in Grünwald near Munich. The Company’s integrated business model comprises in-house development, production and the distribution of brand products by a trained pharmaceutical sales force. In addition to its main location in Brehna near Leipzig, Dermapharm also operates other production, development and distribution locations in Europe (primarily in Germany) and the United States.
