Canopy Growth closes MTL Cannabis acquisition

Executive Summary

• Canopy Growth Corp. has completed the acquisition of MTL Cannabis Corp., creating Canada's leading medical cannabis business by revenue.
• The transaction involves Canopy Growth acquiring 100% of MTL's outstanding shares, with MTL shareholders receiving 0.32 Canopy Growth common shares and $0.144 in cash per share.
• The acquisition strengthens Canopy Growth's position in the Canadian medical market, enhances its premium flower supply, and supports the company's objective of achieving positive adjusted EBITDA by fiscal 2027.

Key Details

• Transaction Structure: Canopy Growth acquired all issued and outstanding common shares of MTL Cannabis Corp.
• Consideration: MTL shareholders received 0.32 Canopy Growth common shares and $0.144 CAD in cash for each MTL share.
• Total Consideration: Canopy Growth issued approximately 41.2 million Canopy Growth shares and paid approximately $18.5 million in cash to Odyssey Trust Company in trust for MTL shareholders.
• Additional Share Issuance: 2,956,391 Canopy Growth shares were issued to former shareholders of Montreal Cannabis Medical Inc. (MC) in exchange for a release of prior obligations related to MTL's acquisition of MC. These shares are subject to an 18-month transfer restriction.
• Strategic Benefits:
  • Establishes Canada's No. 1 market share position by revenue in medical cannabis.
  • Expands access to premium flower supply for Canadian and international markets, including Europe.
  • Deepens operational footprint in Quebec (Canada's second-largest cannabis market).
  • Integrates a profitable, cash-generating business to accelerate margin improvement and support the path to positive adjusted EBITDA by fiscal 2027.
• Leadership Changes:
  • Michael Perron appointed as Chief Operating Officer (former CEO of MTL).
  • Richard Clement and Michel Clement (MTL co-founders) appointed as strategic advisers.
  • Jurgen Bickel (co-founder of Storz & Bickel GmbH) appointed as Managing Director.
• Delisting: MTL shares are anticipated to be delisted from the Canadian Securities Exchange on or about March 16, 2026.
• Advisers:
  • Canopy Growth: Financial adviser Canaccord Genuity Corp.; Legal counsel Cassels Brock & Blackwell LLP and Paul Hastings LLP.
  • MTL Cannabis: Financial adviser Haywood Securities Inc.; Legal counsel Farris LLP.

Notable Quotes

• "The acquisition of MTL is a defining step forward in strengthening Canopy Growth's core Canadian business and advancing our path toward sustainable profitability," said Luc Mongeau, chief executive officer, Canopy Growth.
• "MTL was built on disciplined operations and a relentless focus on quality. With Canopy Growth's scale and reach, we can continue to bring high-quality product to more medical patients and adult-use consumers in Canada and internationally," added Mike Perron, chief operating officer, Canopy Growth, and former chief executive officer, MTL Cannabis.