Canopy Growth Completes Large-Scale Extraction Acquisition, Deal Will Boost Canopy's Extraction Capacity in Canada and USA

Canopy Growth (TSX: WEED) (NYSE: CGC) announced this morning that they have completed the acquisition of Saskatoon-based extraction company KeyLeaf Life Sciences (formerly known as POS Bio-Sciences). Included in the deal were KeyLeaf’s intellectual property and their related entities.

The 2 companies have been working closely together for the past year as trusted partners allowing Canopy to build out its extraction processes and technology in order to refine their extraction model for the Canadian and international markets.

Canopy Growth took control of KeyLeaf for accounting purposes in November of 2018 and KeyLeaf’s financials were consolidated into Canopy’s fiscal 2019 earnings.

This transaction will provide Canopy with a large-scale extraction facility in Canada. The deal also includes an extraction-related facility in the USA which will support Canopy’s plans to expand their hemp/CBD operations in the United States.

KeyLeaf Key Points:

Over 45 years of experience in the nutraceutical, cosmetic, canola, and bio-product space.
Seen as a leading authority in their industry.
Hold significant intellectual property relating to plant-based extraction and ingredients.
Their chemists, engineers, and operators have considerable experience in their field.
- They will remain within the organization to:
  - Further refine the cannabinoid extraction process.
  - Support Canopy with oversight, training, and design.
  - Assist Canopy with the implementation of additional extraction sites around the world.

Source: Shutterstock

Canopy’s Saskatchewan Facility:

KeyLeaf has spent the past year helping Canopy retrofit its Saskatchewan facility to develop advanced technology and boost commercialization capabilities.
The Saskatchewan facility will be able to process hemp and cannabis biomass as well as conduct pre and post-extraction processes.
Once operational the Saskatchewan facility is expected to be able to process up to 5,000 kg of material on a daily basis.
The facility is currently in the Health Canada licensing process.
Canopy plans to use this facility to:
- Process its over 5,000 acres of Canadian hemp CBD production.
- Process over 160 acres of outdoor cannabis production.
- Process any extraction materials produced from its over 4 million sq ft of greenhouse growing operations.
Canopy will then ship the processed materials to Smiths Falls to produce more of their word class products.

Illinois Facility:

The acquisition included KeyLeaf’s industrial-scale ingredient science and innovation facility in Batavia, Illinois.
The Illinois facility is focused on the concentration of key compounds and short path distillation.
- This ensures the output produced is free of impurities for product intended for consumption.
The facility holds several certifications:
- US FDA Food Facility Registration.
- Illinois state hemp processing license.
- Silliker GMP and Food Safety Systems Audit.
The Illinois facility will play a key role in Canopy’s program to bring CBD products to market in the USA by fiscal Q4 2020.
The facility will process the extract required to provide Canopy with the supply needed to support and strengthen the production of their U.S. hemp/CBD products.

“The KeyLeaf operations and team deliver instant scale at a pivotal stage in our growth, with brand new products coming to market later this year requiring sophisticated extraction capabilities at scale,” said Bruce Linton, Chairman & co-CEO, Canopy Growth Corporation. “This acquisition is the result of a year’s worth of work with a trusted partner, and part of our commitment to always staying a step ahead as leaders in a nascent industry focused on the long-game one piece at a time.”

Investors looking for additional information on Canopy Growth are encouraged to visit the company’s website here.

Additional investor due diligence links: Canopy IR Website & Canopy Investor Deck

Stay up to date with all things Canopy Growth by following them on social media: Facebook, Twitter, and LinkedIn

About Canopy Growth:

Canopy Growth (TSX: WEED) (NYSE: CGC) is a world-leading diversified cannabis, hemp and cannabis device company, offering distinct brands and curated cannabis varieties in dried, oil and Softgel capsule forms, as well as medical devices through Canopy Growth’s subsidiary, Storz & Bickel GMbH & Co. KG. From product and process innovation to market execution, Canopy Growth is driven by a passion for leadership and a commitment to building a world-class cannabis company one product, site and country at a time. Canopy Growth has operations in over a dozen countries across five continents.

About KeyLeaf:

KeyLeaf Life Sciences is a global ingredient and process technology company established over 45 years ago. Headquartered in Saskatoon, Saskatchewan, KeyLeaf is recognized around the world as a trusted expert in plant-based bioprocessing. KeyLeaf has worked with over 800 companies from 40 countries and continues to increase Saskatchewan’s global visibility as a hub for innovation.

Read the full Canopy press release