Canada’s biggest marijuana company may soon be a little larger as shareholders voted to approve Canopy Growth’s acquisition of fellow Ontario pot producer Mettrum at a special meeting on Friday.
In a deal first announced last December, Smith Falls-based Canopy Growth Corp. (TSX:CGC) announced it had offered to purchase Mettrum Health Corp. in a friendly all-stock deal valued at $430 million.
Before the deal becomes official, shareholders of both companies needed to vote to approve the acquisition.
Voting shareholders representing more than half of Mettrum’s shares gave more than 99 per cent approval of the acquisition. Support was similarly high on Canopy Growth’s side, with approval at more than 94 per cent, although participation among the company’s shareholders was low with only 20 per cent of eligible votes cast.
Now that shareholder approval has been obtained, the deal needs to pass through an Ontario Supreme Court Justice. The acquisition, if approved, would likely come into effect on Jan. 31.
The resultant merged company would own six licensed marijuana production facilities. Mettrum shareholders would own about 22.3 per cent of the combined company.
"We are delighted that the shareholders of Canopy and Mettrum have demonstrated such strong support for bringing our two companies together," said Bruce Linton, chairman and CEO Canopy Growth, in a statement.
"Our focus remains on expanding production capabilities in order to capture market share through a variety of brands. Mettrum's strong growing platform and brand furthers this strategy."
Prior to announcing its proposed acquisition of Mettrum, Canopy Growth also announced the potential acquisition of MedCann, a German pharmaceutical distributor. MedCann’s acquisition is also subject to approvals.
While primarily a provider of medical marijuana, Canopy Growth is primed to enter the so-called “lifestyle” market later this year when the Liberal government is anticipated to introduce legislation for the legalization of recreational cannabis.
Shares of Canopy Growth failed to respond significantly to the deal, with the stock price dipping 0.4 per cent to $9.96 in early afternoon trading.