Earlier today, Canopy Growth Corporation (TSX: WEED) (NASDAQ: CGC) surprised the market and announced a definitive agreement to acquire 100% of The Supreme Cannabis Company, Inc. (TSX: FIRE) (OTCQX: SPRWF) in a transaction that is valued at approx. $435 million on a fully-diluted basis.

We believe that Canopy Growth made the acquisition to better positioned itself to compete against the previously announced business combination of Aphria Inc. (APHA.TO) (APHA) and Tilray Inc. (TLRY). Today, we have highlighted 7 key details of Canopy Growth’s acquisition and believe that our readers need to be aware of the following:

1. The acquisition is expected to be immediately accretive to Canopy Growth and is expected to strengthen its leadership position in the Canadian recreational market
2. The addition of Supreme Cannabis’ 7ACRES cannabis brand is expected to enhance Canopy Growth’s brand portfolio. Supreme Cannabis’ Blissco and Truverra brands also improve the company’s leverage to the recreational and medical market in Canada. 
3. The transaction will add a low-cost and scalable cultivation facility to Canopy Growth. The facility is Supreme Cannabis’ hybrid-greenhouse cultivation facility which has a track record of consistently producing premium cannabis flower
4. The acquisition is expected to provide Canopy Growth with approx. $30 million of potential cost synergies. 
5. Through Supreme Cannabis, Canopy Growth is expected to reach more cannabis consumers via the ownership of additional premium brands and high-quality products
6. By executing on the Canadian cannabis market, Supreme Cannabis has strong customer loyalty and a proven track record of operating at industry leading efficiency levels. This will support Canopy Growth’s growth strategy by owning premium cannabis products across several key categories
7. With Canopy Growth’s strong balance sheet (approx. $2.5 billion of cash) and Supreme Cannabis’ superior genetics, top-tier cultivation and strict quality control measures, the company is well positioned to capitalize on the international cannabis opportunity (especially in the US when legislation permits). 

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