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Canopy Growth Completes EBBU Acquisition

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Nov. 20 2020, Updated 1:13 p.m. ET

Canopy acquiring IP

Pursuant to its efforts towards the development of intellectual property (or IP) related to cannabis products, Canopy Growth (WEED)(CGC) announced yesterday that it completed the previously announced acquisition of EBBU. Canopy Growth stated that the acquisition will help it make advancements in its THC and hemp-based genetic breeding of cannabis as well as drinks infused with cannabis.

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EBBU’s cannabis research

The above chart shows four broad arms of EBBU’s cannabis research that are expected to contribute towards Canopy Growth’s IP portfolio. According to Canopy Growth, the research will “contribute to the clinical formulations program executed by Canopy Health Innovations, a wholly owned subsidiary.”

This acquisition will likely enable Canopy Growth to reduce its costs of production for its CBD-based cannabis products as well. Since EBBU is a Colorado-based company, Canopy Growth will not sell any products that are a part of EBBU’s research. However, this acquisition does give Canopy Growth some presence in Colorado, which would be especially beneficial if cannabis (HMMJ) were to be legalized in America.

Companies such as Aurora Cannabis (ACB)(ACBFF), Tilray (TLRY), and Aphria (APHQF) are all eyeing the lucrative US market, and these companies will likely make efforts to have a presence in that market if cannabis becomes legal.

Read November Update: How Analysts Rate Cannabis Stocks after Earnings for more information.

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