To follow up on last week’s operational update, Canopy Growth (WEED.TO) (TWMJF) issued an update highlighting operational developments as they relate to international milestones and innovative new product types.
The market responded positively to the company’s update last week and we are favorable on this update as they help increase visibility into growth initiatives and opportunities.
With a track record of building and operating the largest sites in Canada and already overseeing the largest diversified network of sites, including over 500,000 square feet of GMP-certified indoor and greenhouse facilities, Canopy Growth is pleased to announce the first in a series of capacity announcements and expansion plans.
The Highlights (West to East):
- Agreement with Goldman Holdings pursuant to a previously announced memorandum of understanding to start the build-out and licensing process for a 160,000-sq. ft. indoor facility in Edmonton, Alberta.
- Received a cultivation license for the Yorkton, Saskatchewan-based Tweed Grasslands (rTrees) facility.
- Completed the retrofit and expansion project at the Mettrum Bowmanville, Ontario facility which is licensed. The project increased the facility’s product capacity by 200%
- Expect to close the previously announced supply agreement and sale of Mettrum (Bennett North) Ltd. to Cannabis Care Canada soon. Cannabis Care is backed by LiUNA, North America’s single largest construction union with over 100,000 Canadian members
- Expansion at its flagship 1 Hershey Drive Campus in Smiths Falls continues with licensing of 33% more flowering space, licensed and launched production of industrial scale CO2 super-critical extraction. Construction is underway in the remaining 300,000 sq. ft. North Campus area.
- Entered an agreement to acquire a 100,000-sq. ft. facility in Fredericton, New Brunswick with the intention of launching a Tweed facility for indoor production in New Brunswick.
Additional Information
- Smiths Falls Campus – Main Building: The 40 acre campus is Canopy’s largest indoor location and will continue to act as the strategic hub for innovation, consumer shipping, and multi-format value-add conversion activities. The recent licensing of 33% more flowering space at the facility will help the company satisfy increasing demand.
- To support demand for all oil-based products, a custom-built industrial extraction system is now operational in the facility. The new system can produce as much oil in approximately 1 month as the company has produced since extraction activities commenced in November 2015.
- Smiths Falls Campus – North Campus: Another 300,000 square feet of production space is currently in the early stages of demolition and construction. The space, subject to Health Canada approval, is expected to support additional growing and vault capacity, production of value add products for the evolving adult access market, office administration space and a return of the visitor center at the Smiths Falls Hershey Drive campus.
- Tweed Grasslands (rTrees): Became Canopy’s 6th licensed production site after it received its cultivation license. Production will begin next month to support increased demand from medical patients around the world. The facility will be fully operational by early summer 2018.
- New Edmonton Facility Planned: Canopy Growth has leveraged a previously announced memorandum of understanding with Goldman Group to expand its footprint into Edmonton, Alberta with a 160,000-sq. ft. facility that will be leased to Canopy by Goldman Group with an option to purchase the facility at the end of each 5-year quarter of the 20-year lease. The transaction is expected to close August 1st, with the existing tenants vacating October 1st
- Main Bowmanville Facility: The facility received approval for additional flowering rooms which will increase production capabilities by 200%. The rooms will come online concurrently with the completion of retrofit work on the existing rooms
- Fredericton, New Brunswick: Canopy entered an agreement to acquire a 100,000 sq. ft. facility with the intention of launching a Tweed facility for indoor production
- Vert Cannabis Drummondville Site: The application in St. Lucien, Quebec continues to advance through the Health Canada application process and is ready for inspection.
- Mettrum (Bennett North): Per the previously announced deal with Cannabis Care Canada (CCC), the transaction is progressing and is expected to close shortly. Under the terms of the agreement, CCC will pay $7 million in cash to acquire Bennett North and enter a three-year supply agreement with Canopy. As part of the transaction, CCC will assume all outstanding obligations associated with Bennett North. Canopy’s subsidiaries will begin working directly with LiUNA local chapters to support members’ needs.
- Scarborough Sites: Canopy Growth continues to explore partnership opportunities for the original Bedrocan Canada distribution-only licensed site while production continues at the main Scarborough location.
credit:420intel.com