On October 11, 2017, Canopy Growth Corp. (Canopy Growth) entered into a definitive joint venture agreement to form a new company, BC Tweed Joint Venture Inc. (BC Tweed) together with a large-scale greenhouse operator (the Partner) to develop 1.3 million square feet of greenhouse growing capacity in British Columbia. As consideration for entering into and operating BC Tweed, Canopy Growth issued the Partner 310,316 common shares of Canopy Growth over two tranches. At the time of the agreement, Canopy Growth owned 67% of BC Tweed.
On July 5, 2018, Canopy Growth acquired the remaining 33% stake of BC Tweed Joint Ventures Inc. In connection with this acquisition, Canopy Growth paid $1 million in cash and issued $374 million worth of shares to the Partner. In addition, Canopy Growth issued $20 million worth of common shares in connection with an option to acquire certain future infrastructure from the Partner, subject to certain conditions.
BC Tweed significantly supplements Canopy Growth’s industry leading production portfolio and provides Canopy Growth with up to 3 million square feet of greenhouse growing capacity. Since the formation of BC Tweed, over 1.7 million square feet has been licensed for production to meet oncoming recreational cannabis demand across the country.
Cassels Brock & Blackwell LLP acted for Canopy Growth Corp. and BC Tweed with a deal team composed of John Vettese, Cathy Mercer, Aly Somani, Jonathan Sherman and Amanda Metallo (business, securities, cannabis and M&A), Rob Lysy (real estate and cannabis) and Jim Morand (tax).
Mogan Daniels Slager LLP acted for the Partner with a team composed of Benjamin Slager and Andrew Bull (business and M&A).