Canopy Growth to Acquire MTL Cannabis; Transaction Expected to Create Canada's Leading Medical Cannabis Business and Enhance Capacity to Serve Growing International Demand

Executive Summary

• Canopy Growth entered into a definitive arrangement agreement to acquire all outstanding shares of MTL Cannabis for an equity‑cash consideration valued at ~ CAD 125 million (enterprise value ≈ CAD 179 million).
• The transaction is expected to be highly accretive, delivering roughly CAD 10 million of annual run‑rate synergies within 18 months and supporting Canopy’s goal of positive adjusted EBITDA.
• MTL shareholders will receive 0.32 Canopy Growth share plus CAD 0.144 cash per MTL share—a ~45 % premium to the 20‑day VWAP, providing immediate liquidity and exposure to Canopy’s global platform.

Key Details

• Consideration: 0.32 of a Canopy Growth common share + CAD 0.144 cash per MTL share (implied CAD 0.91 per MTL share).
• Total Equity Value: ≈ CAD 125 million (fully‑diluted); Enterprise Value: ≈ CAD 179 million.
• Synergies: Expected cost synergies of ~ CAD 10 million annually, realized over 18 months post‑closing.
• Financial Profile of MTL (TTM ending Sep 30 2025): Net revenue CAD 84 million; gross margin 51 % (pre‑fair‑value adjustments); operating cash flow CAD 11 million.
• Closing Timeline: Anticipated before end‑February 2026, subject to court, shareholder and regulatory approvals.
• Shareholder Approval: Requires ≥ 2/3 of MTL votes in favor at a special meeting (expected Q1 2026).
• Lock‑Up: Approximately 72 % of the Canopy shares issued to MTL shareholders are subject to staggered lock‑up periods (10 % after 3 mo, 20 % after 6 mo, 20 % after 9 mo, 50 % after 12 mo).
• Management Retention: Core MTL team (including founders Richard & Michel Clément) will join Canopy; CEO Michael Perron to become COO of Canopy Growth with restricted stock units and option grants.
• Consulting Agreements: Performance‑based stock unit awards of CAD 2 million each to the Clément brothers.
• Advisors: Canaccord Genuity (Canopy), Haywood Securities (MTL Special Committee); legal counsel – Cassels Brock & Blackwell, Paul Hastings (Canopy) and Farris LLP (MTL).
• Termination Fee: CAD 4 million payable by MTL to Canopy if the transaction is terminated under specified circumstances.

Notable Quotes

“MTL brings skilled operators, strong brands, and a profitable business that will strengthen our leadership in Canada’s medical market… Together, we’re building a stronger, more competitive Canadian business for the long term,” – Luc Mongeau, CEO, Canopy Growth.

“Joining Canopy Growth gives us the platform to bring this philosophy to more Canadians… We look forward to continuing to elevate Canadian cannabis,” – Richard Clément, Co‑Founder & Chief Cultivation Officer, MTL Cannabis.