CGC stock is up 3% this morning after Canopy Growth (TSX:WEED) (NYSE:CGC) announced it had completed its acquisition of cannabis research frim Beckley Canopy Therapeutics, as well as the sale of its 13.2% stake in AusCann Group Holdings.
UK Expansion Aiding CGC Stock Recovery?
Canopy Growth’s acquisition of Beckley Canopy includes the joint venture Spectrum Therapeutics and will see the two companies integrated under the Spectrum label to increase the breadth of clinical cannabis research in the UK. The company will make some changes at boardroom level for its European operations, with Paul Steckler and Steven Wooding assuming the roles of co-managing directors. CGC stock is up slightly following the news after trading at a 52-week low last week.
“The acquisition comes at a time when commercial opportunities across Europe are ramping up. Spectrum Biomedical has completed all necessary approvals to import cannabis into the UK market and is proud to facilitate patient access to safe cannabinoid-based medicines there. Consolidating our UK-based operations will allow Canopy to simultaneously improve its research and commercial capabilities across the continent,” said CEO Mark Zekulin. Investors in CGC shares will be keen to see the company capitalize on a UK market with a potential £16.5 billion value.
$6 Million USD AusCann Sale
Elsewhere, Canopy Growth has also announced the sale of its stake in Australian cannabis company AusCann through an off-market block trade at $0.15 per share for gross proceeds of $6.3 million CAD. Canopy Growth acquired its AusCann stake three years ago in exchange for providing support in entering the Australian market. The company will now focus on its wholly-owned operations in Australia while continuing to collaborate with AusCann. CGC stock is currently valued at $26.49 following the announcement.
CGC stock tumbled last week after HEXO Corp’s (TSX:HEXO) (NYSE:HEXO) withdrawn guidance sent pot stocks tumbling across the board. Analysts’ outlook for Canopy doesn’t make for great reading for investors, with Seaport Global the latest to downgrade its rating from buy to neutral. With legalization 2.0 coming into effect later this week, investors will be hoping it provides the catalyst to turn Canopy Growth’s fortunes around.
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