Canopy Growth Corporation (TSX: WEED) (NYSE: CGC) announced today that it has entered into two agreements with 48North Cannabis Corp. (TSXV: NRTH) a strategic investment financing and partnership and a supply agreement.
Under the Supply Agreement, 48North will supply Canopy Growth with dried cannabis produced from high-grade, unique genetics, grown at 48North’s wholly-owned facility, DelShen Therapeutics Corp. (“DelShen”). The total volume of the Supply Agreement is estimated to be a minimum of 1,200 kilograms and deliverable over the course of 12 months. The first 100-kilogram transfer under the Supply Agreement is expected to ship from 48North’s DelShen facility to Canopy Growth by December 5, 2018.
Under the Financing Agreement, Canopy will invest $3 million into 48North and receive 4,000,000 Common Units at $0.75 per Unit. 48North will issue each Unit at $0.75 to Canopy Growth for $3 million, representing approximately 3.4% of the issued and outstanding shares. Each Unit will be comprised of one Common Share and one quarter Common Share Purchase Warrant. Each full Warrant will entitle the holder to acquire an additional Common Share of 48North for a period of 12 months from the date of issue at a strike price of $1.15, provided that, the expiry of the warrants can be accelerated if the closing price of 48North’s common shares on the TSX Venture Exchange (“TSXV”) is at least $1.50 for a minimum of 10 consecutive trading days and a notice of acceleration is provided, in accordance with the terms of the warrant, to a date 30 days after the date of the notice.
The Supply Agreement further states that Canopy Growth will work with 48North on a non-binding but best-effort basis to establish a national retail presence for its products in Tokyo Smoke and Tweed stores.
“The strategic partnership between 48North and Canopy Growth, a world-leading cannabis company, is a testament to the quality, diversity and consistency of our production, as well as the strength of our branding and product development,” said Alison Gordon, Chief Executive Officer of 48North. “The $3 million equity financing completes our $10 million private placement and will help us build out our next generation of cannabis products. The Supply Agreement provides significant near-term revenue, along with future retail distribution options for 48North’s branded cannabis, cannabis-accessories and next-generation products.”
“Through CraftGrow and Canopy Rivers we’ve always sought supplemental sources of supply in order to offer customers a diverse range of products,” said Mark Zekulin, President & Co-CEO, Canopy Growth. “By adding 48North to the broader repertoire we’ll strengthen our ability to bring exciting cannabis products to market. By acquiring a stake in 48North we recognize the strength of their management team and their ability to successfully launch into the Canadian cannabis market.”
Here’s to Future Growth.
About Canopy Growth
Canopy Growth is a world-leading diversified cannabis and hemp company, offering distinct brands and curated cannabis varieties in dried, oil and Softgel capsule forms. From product and process innovation to market execution, Canopy Growth is driven by a passion for leadership and a commitment to building a world-class cannabis company one product, site and country at a time. The Company has operations in 12 countries across five continents. The Company is proudly dedicated to educating healthcare practitioners, conducting robust clinical research, and furthering the public’s understanding of cannabis, and through its partly owned subsidiary, Canopy Health Innovations, has devoted millions of dollars toward cutting edge, commercializable research and IP development. Through partly owned subsidiary Canopy Rivers Corporation, the Company is providing resources and investment to new market entrants and building a portfolio of stable investments in the sector. From our historic public listing on the Toronto Stock Exchange and New York Stock Exchange to our continued international expansion, pride in advancing shareholder value through leadership is engrained in all we do at Canopy Growth. Canopy Growth has established partnerships with leading sector names including cannabis icon Snoop Dogg, breeding legends DNA Genetics and Green House seeds, and Fortune 500 alcohol leader Constellation Brands, to name but a few. Canopy Growth operates ten licensed cannabis production sites with over 4.3 million square feet of production capacity, including over 500,000 square feet of GMP certified production space.
48North Cannabis Corp. is a vertically-integrated cannabis company focused on the health and wellness market through cultivation and extraction, as well as the creation of innovative, authentic brands for next-generation cannabis products. 48North is developing formulations and manufacturing capabilities for its own proprietary products, as well positioning itself to contract manufacture similar products for third parties. 48North cultivates unique genetics from the Netherlands at its wholly-owned subsidiary, DelShen Therapeutics Corp. (“DelShen”), a Licensed Producer under the Cannabis Act. DelShen is authorized to cultivate and sell cannabis as well as extract oil from its 40,000 square foot indoor facility near Kirkland Lake, Ontario. 48North has a growing portfolio of brands that include Latitude, a women’s cannabis platform and Mother & Clone, a rapid-acting sublingual cannabis nanospray.
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