Canopy Growth Corporation (NYSE: CGC) is having a strong day in the market today, and for good reason. The company announced that it is expanding its European footprint through the acquisition of a Spanish cannabis producer.
As you could imagine, the news excited investors, sending the stock on a run for the top. Today, we’ll talk about:
- The acquisition news;
- what we’re seeing from CGC stock as a result; and
- what we’ll be watching for ahead.
CGC Announces Spanish Acquisition
As mentioned above, Canopy Growth Corporation is having a strong start in the pre-market hours this morning after announcing an acquisition. The announcement came by way of press release early this morning.
In the release, the company announced that it is expanding its footprint in Europe. To do so, it has completed an all-cash acquisition of Spain-based licensed cannabis producer, Cafina.
CGC said that the acquisition lays the foundation for it to expand its European production footprint into one of the most ideal growing regions in the world. The acquisition will complement the company’s existing 430,000 square foot licensed production site in Denmark as well as its ISO 13485 internationally certified Storz and Bickel facility in Germany.
According to the release, Cafina is one of only three companies in Spain that are authorized to cultivate, distribute and export cannabis containing more than 0.2% THC for medicinal and research purposes. The company currently operates a 1,600 sq. ft. greenhouse and is licensed to conduct hemp cultivation.
In a statement, Mark Zekulin, President and co-CEO at CGC, had the following to offer:
Operating multiple production assets within Europe will allow us to increase revenue in the EU free of supply constraints.
This strategic acquisition in a scalable, low-cost production environment diversifies our owned production capabilities in Europe, similar to our approach in Canada where we have production facilities in seven different provinces.
Adding Cafina will allow us to quickly build out our presence in Spain using its existing cultivation licence as a launch pad, while ensuring our Canadian footprint – the largest in the world – can continue to serve the medical and recreational needs of Canadians.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to work in the market is that the news leads to moves. When it comes to Canopy Growth Corporation, the news proved to be positive.
With an expanding footprint in Europe, the company may be edgeing up on the international footprint that we’re seeing from Aurora Cannabis. So, it’s not surprising to see that excited investors are pushing the stock on a run for the top.
As is just about always the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (9:04), CGC is trading at $41.09 per share after a gain of $0.36 per share or 0.88% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on CGC. In particular, we’re interested in following the company’s continued investments in expanded infrastructure as the cannabis market continues to emerge around the world. Remember, those that invest now will likely take the lion’s share of the market later. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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