Pot producer Canopy Growth to sell German medical marijuana business

C3 Metals

15/12/2021 14:24

Dec 15 (Reuters) - Canopy Growth Corp  WEED.TO   CGC.O  said
on Wednesday it would sell its German medical marijuana
business, C3 Cannabinoid Compound Co GmbH, to a European
pharmaceutical firm as the pot producer continues to cut costs
and focus on its core Canadian market.
    Canopy, which bought C3 in 2019 in an all-cash C$342.9
million ($266.52 million) deal, is selling the unit to Germany's
Dermapharm Holding SE  DMPG.DE . 
    The company will receive an upfront payment of about C$115.5
million once the deal closes, expected by Jan. 31, 2022, and up
to C$61.4 million subject to the achievement of select
milestones by the C3 business. (https://bit.ly/3snKymn)
    The unit's revenue has slumped in recent quarters as
lockdown measures in Germany restricted people's ability to
visit doctors and pharmacies. C3 revenue fell 13% to C$11.9
million in the most recent quarterly earnings https://bit.ly/3msRElN
 reported by Canopy.    
    The divesture will help avoid future operational
complexities and cut short-term capital investment requirements
by more than C$50 million, Canopy said, adding that all C3
employees will be retained by Dermapharm.
    
($1 = 1.2866 Canadian dollars)

 (Reporting by Arunima Kumar in Bengaluru;
Editing by Vinay Dwivedi)
 ((Arunima.Kumar@thomsonreuters.com; Twitter: https://twitter.com/Aru_Kumar94
 ;))