Canopy Growth Acquires MTL Cannabis in Bid to Ramp Up Medical Sales

SMITHS FALLS – Canopy Growth Corp., a major player in the Canadian Cannabis sector, has signed a definitive agreement to purchase MTL Cannabis Corp. in a cash-and-stock transaction worth about $125 million on a fully diluted basis. The deal, which carries an enterprise value of roughly $179 million, aims to position the combined operation as the top provider of medical Cannabis in Canada and expand production for export markets.

Under the terms, holders of MTL shares will get 0.32 shares of Canopy Growth plus $0.144 in cash for each share they own, a package that implies $0.91 per share based on Canopy’s Toronto Stock Exchange closing price last Friday. That marks a 45% premium over MTL’s 20-day volume-weighted average price on the Canadian Securities Exchange through December 12. The transaction includes settling MTL’s outstanding debt and certain prior obligations, with about 38 million Canopy shares and $17 million in cash changing hands in total.

The acquisition comes as Canopy seeks to rebuild its footing after years of heavy losses and restructuring. MTL, headquartered in Pickering, Ontario, brings a profitable medical Cannabis arm with trailing 12-month revenue of $84 million and adjusted EBITDA in the black, alongside strong gross margins above 50% before accounting adjustments. Its network includes Canada House Wellness Clinics and the Abba Medix online platform, serving thousands of patients nationwide. Canopy executives project $10 million in annual cost savings from the merger within 18 months, mainly through shared operations and supply chain tweaks.

“This combination gives us the tools to serve patients better across Canada and ramp up flower output for Europe and beyond,” said Luc Mongeau, Canopy’s CEO. MTL’s cultivation sites in Quebec, Canada’s No. 2 Cannabis market by sales, will feed into Canopy’s global push, where medical exports have grown steadily despite domestic adult-use slowdowns. MTL also ranks first among budtenders for flower quality, a nod that could lift Canopy’s own brands in competitive categories.

Shareholders will vote on the plan in February, with closure targeted by month’s end if regulators sign off, including under Canada’s Competition Act. Canopy shares rose as much as 6% in early trading Monday on the news before pulling back, reflecting investor bets on quicker profitability but caution over dilution from the stock component. Analysts see the premium as fair given MTL’s cash flow of $11 million over the past year, though integration snags could temper short-term gains.

Here at Highly Capitalized Network-HCN, where we track the Cannabis pulse with an eye on fundamentals over hype, this step looks like a calculated strategic move in a maturing market. Canopy gains a foothold in Quebec’s regulated channels and a ready-made medical engine, potentially tipping it toward positive earnings sooner than expected. Yet success rests on blending MTL’s craft focus with Canopy’s scale without stoking old execution woes.