Canopy Growth announces acquisition of MTL Cannabis in $179 million deal

Canopy Growth Corporation and MTL Cannabis Corp have announced the signing of a definitive agreement for the full acquisition of MTL. The transaction is valued at approximately $179 million (about $1 billion), including the settlement of the acquired company's debts. The move aims to expand the company's presence in Quebec, the second largest cannabis market in Canada.

Under the agreement, Canopy Growth will acquire all of MTL's issued and outstanding common shares. Shareholders will receive a mixed consideration: 0.32 of a buyer's share and $0.144 in cash per MTL share.

The operation is expected to be completed by the end of February 2026. The closing is subject to regulatory, judicial, and shareholder approvals.

Canopy Growth's Strategy and Market Expansion

The merger aims to integrate MTL's production assets into Canopy Growth's supply chain. With the acquisition, the company gains control of two cultivation facilities in Quebec and incorporates brands like MTL and R'Belle into its portfolio.

According to the announcement, the union is expected to lead the Canadian medical cannabis market. The strategy combines Canopy Growth's distribution network with MTL's online channels, such as Abba Medix.

"MTL brings skilled operators, strong brands, and a profitable business that will strengthen our leadership in the Canadian medical cannabis market. This will consolidate our presence in important adult-use markets, including Quebec," said Luc Mongeau, CEO of Canopy Growth, in a statement.

Mongeau also highlighted the combination of the acquired company's cultivation expertise with the company's national scale. According to the executive, this should "accelerate the path to profitable growth."

Financial Impact for Canopy Growth

The transaction comes at a time when Canopy Growth is aiming to achieve positive adjusted EBITDA. MTL Cannabis reported net revenue of $84 million for the twelve months ended September 2025.

The companies project achieving estimated cost synergies of $10 million annually. This result is expected to be reached in 18 months, driven by operational efficiency and corporate integration.

MTL founders Richard and Michel Clément will remain connected to the company. They will continue to manage cultivation operations after the deal is completed.

"Our portfolios are highly complementary, and we see a great opportunity to expand MTL's reach. We will leverage Canopy Growth's national distribution network and retailer relationships," said Richard Clément, co-founder of MTL.

Legal Procedures of the Acquisition

To be finalized, the deal depends on the approval of at least two-thirds of MTL's shareholders' votes. Additionally, it requires the Canadian court's approval and compliance with the country's Competition Act.

Shareholders representing approximately 75% of MTL's shares have already entered into support agreements for the transaction. The agreement also includes a lock-up period for the sale of the new Canopy Growth shares, gradually released over 12 months.