Marijuana stocks rally after one of Canada’s biggest cannabis companies announces it has agreed to acquire a U.S.-based hemp company.
Marijuana stocks rallied Monday after one of the largest Canadian cannabis companies announced that it has agreed to acquire a U.S.-based hemp company.
Canopy Growth told investors its purchase of Evergreen, Colorado-based ebbu will “complement and accelerate” its ambitions to expand into new types of consumer products.
At closing, Canopy Growth will pay 25 million Canadian dollars in cash and issue 6,221,210 common shares to the research company in exchange for the assets being acquired.
“Intellectual property and research and development advancements achieved by ebbu’s team apply directly to Canopy Growth’s hemp and THC-rich cannabis genetic breeding program and its cannabis-infused beverage capabilities,” Canopy Growth said in a press release.
Shares of Canopy Growth, which trade on the New York Stock Exchange, rallied 9 percent following the news. Tilray, the largest player in the space, saw its stock rise 7.1 percent on the Nasdaq; Aurora Cannabis climbed 7.5 percent in Toronto.
Ebbu specializes in the purification and study of cannabinoids for product development, wholesale and research purposes, according to its website. It also uses patented plant genetics to maximize cannabinoid output by “boosting in-plant cannabinoid production and creating rare-cannabinoid-specific plants.”
Representatives for Canopy Growth and ebbu were not immediately available for comment. [Read More @ CNBC]