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 a definitive Arrangement Agreement to acquire all outstanding shares of MTL Cannabis in a transaction valued at ~ CAD 125 million (equity) / CAD 179 million (enterprise).
• Consideration: each MTL share receives 0.32 Canopy Growth share plus CAD 0.144 cash, representing a ~45 % premium to the 20‑day VWAP.
• The deal is expected to be highly accretive, delivering approximately CAD 10 million of run‑rate synergies within 18 months and supporting Canopy’s goal of positive adjusted EBITDA.

Key Details

• Transaction Structure – Court‑approved plan of arrangement under the Canada Business Corporations Act; requires ≥ 2/3 MTL shareholder approval and a simple majority excluding excluded votes.
• Consideration per Share – 0.32 Canopy Growth common share + CAD 0.144 cash (implied CAD 0.91 per MTL share).
• Total Equity Consideration – ~CAD 125 million for all 137 million fully‑diluted MTL shares (excluding up to 2,956,391 Canopy shares issued to former MC shareholders).
• Enterprise Value – Approximately CAD 179 million.
• Synergy Estimate – ~$10 million annualized cost synergies expected within 18 months post‑closing.
• Financial Profile of MTL (TTM) – Net revenue CAD 84 million; gross margin ~51 % (pre‑fair value adjustments); operating cash flow CAD 11 million.
• Premium to Shareholders – ~45 % premium based on 20‑day VWAP as of Dec 12, 2025.
• Liquidity Benefit – MTL shareholders gain exposure to highly liquid Canopy Growth shares (average daily volume > CAD 35 million).
• Management Retention – Core MTL team (including founders Richard & Michel Clément) will join Canopy; Michael Perron (MTL CEO) to become COO of Canopy Growth.
• Lock‑Up Provisions – Approximately 72 % of the newly issued Canopy shares are subject to staggered lock‑up periods (10 % after 3 mo, 20 % after 6 mo, 20 % after 9 mo, 50 % after 12 mo).
• Consulting & Employment Agreements – Performance stock units of CAD 2 million for the Clément brothers; restricted stock units (CAD 30 k) and options (CAD 20 k) for Perron.
• Closing Timeline – Expected before end‑February 2026, subject to court, shareholder, regulatory (TSX, Competition Act) and other customary approvals.
• Advisors – Canaccord Genuity (financial advisor to Canopy); Cassels Brock & Blackwell LLP & Paul Hastings LLP (legal counsel to Canopy); Haywood Securities (financial advisor/fairness opinion for MTL).

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 that philosophy to more Canadians… We look forward to continuing to elevate Canadian cannabis,” – Richard Clément, Co‑Founder & Chief Cultivation Officer, MTL Cannabis.