Canopy Growth Corporation


Canopy was Canada’s first publicly traded medical marijuana company, and the first to graduate from the TSX Venture to the TSX. It obtained its first license from Health Canada in November 2013, and began shipments in May 2014. It then expanded its product breadth to include cannabis oils in February 2016. The Company is headquartered in Smiths Falls, Ontario, which is south of Ottawa. Canopy’s stated objective is to be the dominant supplier of legal marijuana across all value and premium product markets. The $335M acquisition of Mettrum in January 2017 is a major step in that direction. Priorities include market share growth, moving downstream into value-add cannabis-based products, and international expansion.

Canopy operates four production facilities located in Ontario using a combination of indoor and greenhouse growing methods. The Company is currently licensed for annual production of 14,500 kg of dried cannabis and 6,700 kg of cannabis oil, representing over 7M millilitres of finished cannabis oil. Ongoing expansions efforts could add another 16,000 kg of annual production capacity. That does not include Mettrum’s operations (which we cover separately) and Vert Medical, a late-stage production license applicant that Canopy acquired in November 2016.

Canopy has been particularly active in this regard. The Company has a small interest in AusCann, in return for which Canopy is to provide expertise and advisory services for AusCann’s development in Australia. It has entered into a joint venture (JV) for the export of proprietary cannabis varieties to Brazil, and completed its first export in November 2016. In July 2016, it obtained the approvals required to begin exports for sale to patients in Germany – the first known export of dried cannabis by a Canadian LP to a major G7 country – and it followed by acquiring its German-based distribution partner in December 2016.

Launch Of Spectrum in mid 2017.

In December 2016, one of the Company’s facilities was granted a CDSA dealer’s license, allowing it to undertake analytical testing of cannabis and its related components. The Company also announced the formation of Canopy Health Innovations (CHI), a private company formed to act as WEED’s cannabis research incubator. Canopy Growth Corporation retains a right-of-first-refusal on licensing and commercializing IP developed by CHI.

In January 2017, the Company acquired Mettrum Health for $335M in stock. Mettrum is a licensed producer of medical cannabis (dried and oils) and industrial hemp-based products. The Company currently produces approximately 16 strains from a genetic library of over 60 strains, which it refers to as the Mettrum SpectrumTM. It received its first license in November 2013, and began selling in January 2014. Prior to its acquisition by Canopy, Mettrum was working towards an annual capacity target of 25,000 kg by March 2018.

Mettrum’s Creemore facility in Clearview, Ontario, is licensed for annual production and sales of up to 2,000 kg of dried marijuana, 1,500 kg of cannabis oil, and 200 kg of cannabis resin. The Company’s Bowmanville facility is licensed for annual production of 1,600 kg of dried marijuana, 1,600 kg of cannabis oil, and 100 kg of cannabis resin. Both facilities are also authorized to sell specific amounts to other LPs. The Company has a third facility – Mettrum North (also in Bowmanville) – and has announced plans to sell it to Cannabis Care Canada for $7M, while entering a three-year supply agreement. Mettrum’s current Phase II expansion is expected to take capacity to 18,000 kg by March 2017, and it has already started work on its Phase III expansion to take annual capacity to 25,000 kg by March 2018.

In April 2015, Mettrum acquired its hemp business, renaming it Mettrum Hempworks. It sells 30 SKUs of hemp-based food and personal care products, offered in over 2,000 stores under the Mettrum Originals brand. Products include flour, cooking mixes, lip balm, and oils. In May 2016, it entered into a three-year agreement with Live Nation (LYV-NYSE, NR), giving Mettrum Originals exclusive name and marketing rights for the lawn at the Molson Amphitheatre in Toronto. The agreement also gives Mettrum Health the rights to sample and sell Originals’ products at the venue.