The world’s largest marijuana company has announced a major acquisition in the cannabis research space. Canopy Growth Corp (NYSE: CGC) announced on Friday that it entered into an agreement to buy a global CBD-based medical researcher known as Beckley Canopy Therapeutics.
Although Canopy didn’t’ reveal exactly the terms and the price they paid for the acquisition, it is known that Beckley had been previously founded as a joint venture project in 2018, with Canopy now fully cementing their ownership of the company.
Canopy Growth co-founded Beckley Canopy back in early 2018 alongside the U.K.-based think tank called Beckley Research & Innovations. Over the past year and a half, the research company has been making major inroads in three areas of pharmaceutical research, cancer pain, opioid-sparing, and smoking cessation through the use of CBD and cannabis-derived compounds as a major ingredient. These projects are currently still undergoing but have shown promising signs.
All of these areas have become hot markets in the biotech and pharmaceutical sectors, with cancer treatment, in particular, getting plenty of attention. If the CBD industry could make inroads in developing a drug or compound for this sector, it would skyrocket the demand for cannabis derivatives even further.
“The acquisition of Beckley Canopy will allow Spectrum Therapeutics to continue expanding its medical cannabis leadership around the world, strengthening our foothold in the UK and more broadly across Europe – a region that wants to see stronger clinical evidence around cannabis-based medicines,” said Canopy Growth CEO Mark Zekulin. “We’re excited to continue working with the incredible management team at Beckley Canopy to accelerate our shared vision to create evidence-based cannabis formulations that will serve patients in need around the world.”
Shares of Canopy Growth didn’t move much in response to the news, ending the day up only 0.2 percent but has already given back 0.6 percent in after-hours trading. Over the past six months, the stock has been sporadic. Besides a brief recovery period in mid-April, shares of Canopy Growth have been falling, having given back around a third of its market value so far.
At the same time, the recent departure of the company’s former CEO, Bruce Lipton, has sent ripples of concern throughout the marketplace as investors begin worrying that the company might not be in as good of a position as they first would have thought.
Wall Street’s top cannabis analyst, Vivien Azer, surprised some when months ago she picked Aurora Cannabis (NYSE: ACB) as her top pick in the industry, ousting Canopy Growth. While the decision raised some eyebrows at the time, it seems that she made the right choice as Aurora seems to be in a stronger position at the moment.
Canopy Growth Company Profile
Canopy Growth, headquartered in Smiths Falls, Canada, cultivates and sells medicinal and recreational cannabis, and hemp, through a portfolio of brands that include Tweed, Spectrum Therapeutics, and CraftGrow. Although it primarily operates in Canada, Canopy has distribution and production licenses in more than a dozen countries to drive expansion in global medical cannabis and also holds an option to acquire Acreage Holdings upon U.S. federal cannabis legalization. – Warrior Trading News