Canadian cannabis company Canopy Growth Corp. (CGC) said Monday, Oct. 15, it reached an agreement to buy the assets of Ebbu Inc., a Colorado-based medicinal marijuana research company, for roughly $19.2 million (C$25 million) in cash and 6.2 million shares.
The deal, which could include an additional $77.7 million in cash and shares within two years if certain goals are met, would help expand Canopy's business of branding cannabis and hemp softgels, oils and other products, said Canopy in a statement.
Canopy would gain Ebbu's intellectual property and research and development know-how, as well as potentially advance its own genetic breeding program for cannabis and further its drink development efforts.
Canopy shares rose 6.8% to $53.17 on Monday.
Over the weekend, Canopy Growth CEO Bruce Linton told TheStreet's Jim Cramer during his Boot Camp for Investors in New York that he believes marijuana-related products could shakeup several industries beyond smoking, including pet care, beverages, sleep aides, and medications for appetite loss, arthritis and other conditions.
"All of a sudden you start adding these categories together [and] that is a huge $500 billion segment of business," Linton said.
But even as some U.S. states such as Massachusetts are easing laws around pot, Canopy said it will only sell its products here if they are federally legal.
Canada will become the second nation in the world to legalize recreational pot use later this week.