Canopy Growth to buy Supreme Cannabis for C$323 mln as pot demand lights up
Updates with details on the deal, background
April 8 (Reuters) - Canada's Canopy Growth Corp WEED.TO, CGC.O said on Thursday it will buy rival Supreme Cannabis Co Inc FIRE.TO for C$323.3 million ($256.85 million), as the world's biggest cannabis producer bolsters its portfolio to tap surging demand.
U.S.-listed shares of Canopy rose 1.3% to $30.33 after it announced the cash-and-stock deal for Supreme, which owns pot brands including 7ACRES and Blissco.
Easing regulatory hurdles and a rise in weed use during the pandemic has brought back investor dollars for cannabis producers after years of underperformance.
Canada saw legal recreational weed sales surpass illicit channels for the first time in the fourth quarter of last year.
The deal makes Canopy the owner of four out of the top ten cannabis brands in Canada, with an estimated 13.6% of the total recreational market share in the country, the companies said.
Under the terms of deal, Supreme Cannabis shareholders will receive 0.01165872 of a Canopy common share and C$0.0001 in cash in exchange for each Supreme Cannabis share held.
Including debt, the deal is valued at C$435 million.
($1 = 1.2587 Canadian dollars)
(Reporting by Arunima Kumar and Shariq Khan in Bengaluru; Editing by Arun Koyyur and Devika Syamnath)
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