As might be expected, the management team at Canopy Growth Corp. (CGC) is hard at work, yet again, allocating the capital they raised from Constellation Brands (STZ). With billions of dollars in cash on hand, the company is working to expand into new markets not only through organic means but also by acquiring cannabis-oriented firms that already have a firm presence in their respective regions. This latest move, the company’s decision to acquire C3 Cannabinoid Compound Company, a subsidiary of Bionomica SE. This move, though costly, especially in relation to the sales generated by C3, has some merit for Canopy and it could, as time progresses, pave the way for additional value creation for investors down the road.
A look at the transaction
For around 20 years, Bionomica SE has been working with cannabis and, as a result, its subsidiary, C3, has five different medicines on the market today. Currently, those medicines, collectively referred to as dronabinol, are distributed in Germany, Austria, Switzerland, and Denmark. In Germany alone,