Canadian cannabis producer Canopy Growth Corp. is making a C$430 million bet ($330 million in USD) on the acquisition of ebbu, a Colorado-based hemp and cannabis research firm.
According to a Bloomberg report, the deal will include a C$25 million cash payment and 6.22 million Canopy Growth shares.
Canopy Growth — which has said it would not enter the U.S. cannabis market until the plant has been federally approved — issued a statement on Monday suggesting the acquisition is in “clear accordance with current U.S. federal law.” In that release, Canopy Growth reconfirmed that it would not conduct any cannabis production or sales efforts on U.S. soil until federal legalization is realized.
Ebbu is a hemp and cannabis research firm focused on identifying and understanding cannabinoids. Canopy Growth intends to utilize ebbu’s intellectual property and research advancements to improve its hemp and cannabis genetic breeding programs, cannabis-infused beverage capabilities, and to further health research.
In its release, Canopy — which also owns a hemp operation in Saskatchewan — suggested the ebbu acquisition will allow the company “to vastly reduce the cost of CBD production, a sought-after cannabinoid in both the wellness and medical spaces.”
Canopy Growth rocked the cannabis industry news cycle earlier this year when it secured a $4 billion investment from alcohol maker Constellation Brands to advance the CBD-infused beverage industry.
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