The Globe and Mail reports in its Friday, April 9, edition that Canopy Growth is in a $435-million stock and cash deal to acquire The Supreme Cannabis Company, paying a 66-per-cent premium over Supreme's Wednesday closing stock price. The Globe's Vanmala Subramaniam writes that at a price of 26 cents, Supreme has a market value of about $145-million. The deal will see Supreme's shareholders receive 0.01165872 of a Canopy common share and .0001 cent in cash in exchange for each Supreme share held. Supreme's most prominent brand is 7ACRES, which has almost consistently been one of the top 10 best-selling premium cannabis products in the country. Canopy has long struggled to make a significant dent in the premium flower market -- this acquisition, according to the company, will allow it to expand its recreational market share to about 13.6 per cent. Supreme's business strategy had for years focused on tapping into the so-called weed connoisseur market, selling premium cannabis for above-market prices. However, the Canadian pot industry experienced a severe oversupply problem for most of late 2019 and 2020, forcing most producers to drastically slash their prices, leaving Supreme in an uncompetitive position.
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