JOINT VENTURE INCLUDES OPTION FOR ADDITIONAL 1.7 MILLION
SQ. FT. GREENHOUSE
SMITHS FALLS, ON, Oct. 11, 2017 /CNW/ - Canopy Growth
Corporation (TSX: WEED) ("Canopy Growth" or the "Company") is
pleased to announce that it has entered into a definitive joint
venture agreement to form a new company, BC Tweed Joint Venture
Inc. (the "Joint Venture") together with a large-scale
greenhouse operator ("the Partner") to develop 1.3 million sq. ft.
of greenhouse growing capacity in British
Columbia with an exclusive option to develop a further 1.7
million sq. ft. of existing greenhouse infrastructure at a second
BC location.
Applications have been submitted for both sites and subject to
Health Canada and other standard regulatory approvals, as well as a
bit of luck, the Company is hopeful that it will have product
available from the Joint Venture as soon as July 1, 2018.
Under the terms of the agreement and subject to third-party
approvals required by the Partner, the Joint Venture has
conditionally agreed to lease a 1.3 million sq. ft. (30-acre)
greenhouse facility located on a 55-acre parcel of land in BC from
an affiliate of the Partner, with an option to acquire the
property. The Joint Venture significantly supplements the
Company's industry leading production portfolio and positions
Canopy Growth with production and distribution facilities from
coast to coast across the country.
"The Joint Venture allows us to expand our operational
footprint for greenhouse production while increasing our
institutional knowledge of operating large scale greenhouses," said
Bruce Linton, Chairman and CEO,
Canopy Growth. "Our cannabis expertise already operating the
largest cannabis greenhouse in the sector combined with experience
of our new partner's extensive large-scale greenhouse production
record, is great news for our customers and investors."
As consideration for entering into and operating the Joint
Venture, Canopy Growth will, based upon various milestones and
subject to required regulatory and stock exchange approvals, issue
the Partner 310,316 common shares of Canopy Growth over two
tranches and a further $2.75 million
of common shares in two remaining tranches. Canopy Growth owns 66
2/3% of the Joint Venture.
To fund the development of the Joint Venture, Canopy
Growth will contribute, in multiple tranches, an aggregate of
$20 million in cash (of which
approximately $1 million was advanced
at closing), in exchange for Class A Preferred Shares with
cumulative preferred dividends.
Following the expansion announcement at the Company's existing
Tweed Farms Inc. greenhouse facility in Niagara-on-the-Lake, ON, this Joint
Venture will increase the total pro-forma greenhouse production
footprint at Canopy Growth operation to approximately 2.3 million
sq. ft., with an exclusive option to bring that footprint to 4.0
million sq. ft.
The Company has also announced indoor capacity expansion plans
that will bring its total indoor production capacity to
approximately 900,000 sq. ft.
The BC Tweed Joint Venture Partner brings
multi-generational knowledge of greenhouse operations and
efficiencies having managed and operated over 5.8 million square
feet of greenhouse infrastructure in various climates throughout
North America over the past 30
years. The Partner is an experienced large scale, low cost,
hydroponic greenhouse operator, with industry leading food safety,
traceability and compliance expertise and a deep focus on
sustainable production practices and efficiencies. The Partner
brings tier one assets and an operations team with over 200 years
of combined growing experience.
This Joint Venture represents the sixth province with Canopy
Growth operations. The Company is committed to building an
international business with a strong national platform while
supporting the local communities where it operates through job
creation, meaningful stakeholder engagement, and local economic
opportunity, highlighted most recently with the donation of over
3300 pounds of food and household goods across its sites to benefit
local food banks in the lead up to Thanksgiving.
Here's to Future Joint Venture Growth.
About Tweed
Tweed is a globally recognized marijuana production brand. It
has built a large and loyal following by focusing on quality
products and meaningful customer relationships. Tweed doesn't just
sell marijuana, it facilitates a conversation about a product we've
all heard about but haven't met intimately yet. It is approachable
and friendly, yet reliable and trusted. As marijuana laws
liberalize around the world, Tweed will expand its leading Canadian
position around the globe. Learn more at www.tweed.com.
About Canopy Growth Corporation
Canopy Growth is a world-leading diversified cannabis company,
offering distinct brands and curated cannabis varieties in dried,
oil and capsule forms. Through its wholly‑owned subsidiaries,
Canopy Growth operates numerous state-of-the-art production
facilities with over half a million square feet of GMP-certified
indoor and greenhouse production capacity, all to an unparalleled
level of quality assurance procedures and testing. Canopy Growth
has established partnerships with leading sector names in
Canada and abroad, with interests
and operations spanning four continents. The Company is proudly
dedicated to educating healthcare practitioners, providing
consistent access to high quality cannabis products, conducting
robust clinical research, and furthering the public's understanding
of cannabis. For more information visit www.canopygrowth.com.
Notice Regarding Forward Looking Information
This news release contains forward-looking information. Often,
but not always, forward-looking information can be identified by
the use of words such as "plans", "expects" or "does not expect",
"is expected", "estimates", "intends", "anticipates" or "does not
anticipate", or "believes", or variations of such words and phrases
or state that certain actions, events or results "may", "could",
"would", "might" or "will" be taken, occur or be achieved.
Forward-looking information involves known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of Canopy Growth Corporation, its
subsidiaries, or the Joint Venture to be materially
different from any future results, performance or achievements
expressed or implied by the forward-looking information contained
in this news release. Examples of such statements include future
operational and production capacity, the receipt of third-party,
regulatory and stock exchange approvals, the Company's expansion
plans, including the announced indoor and greenhouse capacity
expansion plans, the acquisition of the properties in BC, the
impact of enhanced infrastructure and production capabilities, the
timeline for licensing and production at the greenhouse facilities
in BC, the issuance of common shares of the Company to the Partner,
the contribution to be made by Canopy Growth to the Joint
Venture, the adult-use market in Canada and the timeline for implementation,
and the Company's expectations about its positioning and branding
in the Canadian adult-use market. Risks, uncertainties and other
factors involved with forward-looking information could cause
actual events, results, performance, prospects and opportunities to
differ materially from those expressed or implied by such
forward-looking information, including risks associated with:
Health Canada's licensing process under the ACMPR; federal,
provincial and municipal regulations; obtaining building permits
and construction timelines; availability of financing; third-party,
regulatory and stock exchange approvals; and such risks contained
in the Company's annual information form dated June 28, 2017 and filed with Canadian securities
regulators available on the Company's issuer profile on SEDAR at
www.sedar.com. Although the Company believes that the assumptions
and factors used in preparing the forward-looking information in
this press release are reasonable, undue reliance should not be
placed on such information and no assurance can be given that such
events will occur in the disclosed time frames or at all. The
forward-looking information included in this news release are made
as of the date of this news release and the Company does not
undertake an obligation to publicly update such forward-looking
information to reflect new information, subsequent events or
otherwise unless required by applicable securities legislation.
Neither the TSX Exchange nor its Regulation Services Provider
(as that term is defined in policies of the TSX Exchange) accepts
responsibility for the adequacy or accuracy of this release.
SOURCE Canopy Growth Corporation