Canada's Canopy Growth Corp. said it is going to acquire ebbu ebbu Inc., an Evergreen, Colo.-based hemp research company.
The Canadian medical cannabis company will pay C$25 million in cash and issue 6,221,210 of its common shares to ebbu, as well as up to C$100 million based on the achievement of certain milestones within two years after deal closing.
The acquisition of ebbu is meant to help bolster Canopy's research capabilities, particularly in the company's cannabis genetic breeding program and its cannabis-infused beverage offerings. By applying ebbu's intellectual property, Canopy could vastly reduce the cost of producing cannabidiol, the sought-after cannabis ingredient in the wellness and medical spaces.
Elsewhere, ebbu's expertise will also come in handy at Canopy's health-focused subsidiary Canopy Health Innovations which is developing cannabinoid-based clinical formulations for acute and chronic illnesses.
ebbu will continue to pursue R&D activities in the U.S. but will not produce or sell products resulting from such research unless it becomes federally legal to do so.
The acquisition, which is expected to close in November, is subject to regulatory approvals, including approvals by the Toronto Stock Exchange and New York Stock Exchange.