Full Press Release Details
constitutes a "designated news release" for the purposes of Canopy Growth's prospectus supplement dated August 29,
2025 to its short form base shelf prospectus dated June 5, 2024
amounts in this press release are expressed in Canadian dollars.
to Acquire MTL Cannabis;
Transaction Expected to Create Canada's Leading Medical Cannabis Business and Enhance Capacity to Serve Growing International Demand
business combination expected to generate significant run-rate synergies of approximately $10 million within 18 months
Growth's presence in Qu bec with an opportunity to expand national distribution of MTL's high-quality, budtender-recommended
management team is expected to join Canopy Growth to drive cultivation excellence and enhance the Company's product quality and
operational performance
Implied consideration
of $0.91 per MTL Share based on the closing price of Canopy Growth Shares on the TSX as of December 12, 2025. Represents a 45% premium
to the average 20-day VWAP of MTL Shares on the CSE as of December 12, 2025
FALLS, ON and POINTE-CLAIRE, QC- December 15, 2025
- Canopy Growth Corporation ("Canopy Growth" or the "Company") (TSX: WEED) (Nasdaq: CGC) and MTL Cannabis
Corp. ("MTL Cannabis" or "MTL") (CSE: MTLC) (OTCQX: MTLNF) are pleased to announce that they have entered
into a definitive arrangement agreement (the "Arrangement Agreement") pursuant to which Canopy Growth will acquire all
of the issued and outstanding common shares of MTL (the "MTL Shares") and will settle all debt and debt-like instruments
owed by MTL, in a transaction valued at approximately $125 million on a fully-diluted equity basis (the "Transaction") and
approximately $179 million on an enterprise value ("TEV") basis. Under the terms of the Arrangement Agreement, each shareholder
of MTL (an "MTL Shareholder") will receive fixed consideration for each MTL Share equal to: (i) 0.32 of a common share
of Canopy Growth (each whole share, a "Canopy Growth Share"), and (ii) $0.144 in cash.
MTL was founded by Qu bec-based
entrepreneurs and brothers, Richard and Michel Cl ment, who built the company around a deep commitment to cultivating high-quality
cannabis flower. The quality of the cannabis products produced by MTL's disciplined, craft-driven cultivation approach has earned
national recognition, including being named Canada's #1 budtender-recommended brand in a 2024 Brightfield Study1. MTL
brings proven operations excellence, loyal consumer demand, and a track record of producing cannabis that performs in market. Canopy
Growth intends to leverage the expertise of the MTL team as it continues to elevate its cannabis product portfolio.
"MTL brings skilled operators,
strong brands, and a profitable business that will strengthen our leadership in Canada's medical market and deepens our presence
in key Canadian adult-use markets, including Qu bec. Their cultivation expertise, combined with our national scale, positions
us to improve product quality, expand supply, and accelerate our path to profitable growth. Together, we're building a stronger,
more competitive Canadian business for the long term," said Luc Mongeau, Chief Executive Officer, Canopy Growth
Canada's #1 budtender-recommended brand in the 2024 Brightfield Study, Brightfield Group, Canadian Budtender Study 2024 (in partnership
with O2O). Findings based on a survey of ~670 Canadian budtenders across multiple provinces in Canada.
"MTL was built on the idea that
high-quality flower, grown with care and consistency, will always earn the trust of consumers and patients. Joining Canopy Growth gives
us the platform to bring that philosophy to more Canadians. Our respective portfolios are highly complementary, and we see a strong opportunity
to expand MTL's reach through Canopy Growth's national distribution and retail relationships. We're incredibly proud
of what our team has built and look forward to working with Canopy Growth to continue elevating Canadian cannabis," said Richard
Cl ment, Co-Founder and Chief Cultivation Officer, MTL Cannabis
Key Transaction Highlights
Expected to elevate Canopy Growth
to the leading position in Canada's medical cannabis market
MTL's complementary patient network,
strategically located clinics under the Canada House brand, and established online medical channel, Abba Medix, expands Canopy Growth's
ability to reach and support patients nationwide. With the addition of MTL, Canopy Growth's Canadian medical cannabis business
is expected to establish the combined company as the leading medical cannabis provider in Canada.
Leveraging MTL's production
assets to bolster flower supply for Canadian and international markets
Canopy Growth intends to fully integrate
MTL's cultivation and post-harvest assets into its supply chain. The resulting increase in high-quality flower supply is expected
to enhance the Company's ability to meet growing demand in the European medical cannabis market and support continued category
Strengthens Canopy Growth's
presence in Qu bec, Canada's second-largest cannabis market
The Transaction provides Canopy Growth
with a more significant operational, brand and product footprint in Qu bec, including two cultivation facilities, as well as the
high-quality cannabis flower and hash products sold under the MTL and Qu bec-exclusive R'Belle brands. The Transaction is
expected to meaningfully enhance the Company's ability to serve Qu bec's adult-use consumers.
Improves Canopy Growth's market
ranking in core Canada adult-use product categories
MTL's award-winning2,
budtender-recommended brand portfolio3 holds #1 national market share in upper mainstream flower4 and #4 national
market share in upper mainstream pre-roll joints ("PRJ")5. The Transaction establishes a combined company with
the #7 position in total adult-use cannabis market share6. Canopy Growth intends to leverage its broad distribution network
and key relationships to expand the distribution of MTL's flower, PRJ and hash product portfolio in British Columbia, Alberta,
2. Brand of the Year at the 2024 Grow
Up Conference, Toronto, Canada
3. Recognized as Canada's #1 budtender-recommended
brand in the 2024 Brightfield Study, Brightfield Group, Canadian Budtender Study 2024 (in partnership with O2O). Findings based on a
survey of ~670 Canadian budtenders across multiple provinces in Canada.
the Company's internal proprietary market analysis tool that applies sales data supplied by third-party providers and government agencies
(last 13 weeks ended November 2, 2025).
the Company's internal proprietary market analysis tool that applies sales data supplied by third-party providers and government agencies
(last 13 weeks ended November 2, 2025).
the Company's internal proprietary market analysis tool that applies sales data supplied by third-party providers and government agencies
(last 13 weeks ended November 2, 2025).
Accretive Transaction expected to
support Canopy Growth's goal of achieving positive adjusted EBITDA
Upon closing of the Transaction, MTL's
profitable, on an adjusted EBITDA basis, cash-generating business will be integrated into Canopy Growth's ecosystem. MTL has
previously reported net revenue of $84 million7, 51% gross margin before fair value adjustments8, and $11 million
in operating cash flow9 in the trailing twelve-month period ended September 30, 2025 ("TTM period").
The Transaction is expected to achieve potential cost synergies estimated at approximately $10 million, on an annualized basis,
over a period of 18 months, which are expected to be realized from anticipated operating efficiencies and corporate integration. With
MTL's reported strong gross margin performance and positive cash flow from operations10 and the anticipated post-Transaction
cost synergies, the acquisition of MTL is expected to be materially accretive to Canopy Growth's overall financial performance.
Combined with the progress that Canopy Growth has made to reduce operating expenses during the fiscal year ended March 31, 2026,
reported at over $20 million in expense reductions on an annualized basis as of the end of the six-month period ended September 30,
2025, the Company expects that the Transaction will support its goal of achieving positive adjusted EBITDA.
Strengthen Canopy Growth's
leadership capabilities through retention of key MTL management
The Company expects to retain core members
of MTL's leadership team, including its experience in cultivation and operations. MTL has proven expertise in high-quality flower
production, genetics selection, supply chain management, and facility operations. This will complement Canopy Growth's existing
capabilities and reinforce operational discipline through integration and ongoing cultivation improvement.
Further Benefits to MTL Shareholders
MTL Shareholders receive attractive
The Transaction provides MTL Shareholders
with a premium per MTL Share of approximately 45% based on the average 20-day volume weighted average trading price of the MTL Shares
on the Canadian Stock Exchange and the Canopy Growth Shares on the Toronto Stock Exchange (the "TSX") as of December 12,