Canopy acquires German cannabis company C3 for $253 million

Canadian marijuana giant Canopy Growth has acquired Germany-based C3 Cannabinoid Compound Company from Bionorica in an all-cash deal for 226 million euros ($253 million).

The deal is one of the largest cannabis acquisitions in the European market to date.

C3 generated revenue of $30 million in 2018 from five products, according to a news release.

The subsidiary of Bionorica manufactures both natural and synthetic THC and CBD, and sells cannabinoids in Germany, Austria, Switzerland and Denmark.

The company said it has supplied roughly 19,500 patients in Germany with dronabinol in 2018.

Jefferies International analyst Owen Bennett said Canopy was pressed into action after it failed to win a cannabis cultivation bid from German authorities last month.

“Somewhat surprisingly, given their historic sales performance in Germany, Canopy was not awarded a lot, and it seems this move goes some way to addressing the snub in our view,” Bennett wrote in a note to investors.

“Through this acquisition, Canopy will acquire many of the benefits of that the German tender would have: approved operations within Germany, distribution and relationships with German pharmacies/patients, and a route to sales growth.”

Bionorica’s cannabinoid production facilities – along with around 100 employees – will be taken over by Canopy.

A long-term research cooperation agreement between the two companies limited to research with dronabinol and CBD was also announced.

Bionorica started a clinical trial last November to research the effect of dronabinol to treat multiple sclerosis, and that will remain a key part of the research cooperation with Canopy.

Dronabinol is sold as a magistral preparation, where the medicinal product is transformed into a final product, such as an mixed with an oil, by the pharmacist according to the prescription.

The product failed an attempt to become a registered pharmaceutical drug, meaning statutory reimbursement for it in countries such as Germany is not automatic.

Alfredo Pascual can be reached at [email protected].

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