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Canopy Growth Corporation (“Canopy Growth” or the “Company”) (TSX: WEED) (NYSE: CGC) is pleased to announce today that has signed an offtake agreement with PharmHouse Inc. (“PharmHouse”), a 49 per cent-owned joint venture of Canopy Rivers Inc. (TSXV: RIV) (OTC: CNOPOF).
Under the terms of the agreement, PharmHouse has agreed to allocate high quality cannabis flower from an additional 20 per cent of the flowering space available at its Leamington greenhouse facility over the next three years.
Boasting 1.3 million square feet of greenhouse grow space, and leveraging the resources of Canopy Growth, Canopy Rivers and its joint venture partner have worked diligently since October 2018 to prepare the facility for licensing.
PharmHouse will leverage Canopy Growth’s genetics – selected and supplied by the Company – and flower will be returned to the Company to be sold under Canopy Growth’s diverse brands and banners.
Under the terms of the new offtake agreement, PharmHouse is committed to producing GMP-certified, high quality cannabis flower within 18 months of its cultivation license and the flower must comply with the Company’s high standards for cannabis quality. GMP, or Good Manufacturing Practices, certification is the internationally recognized system to ensure all produced goods meet the highest consumer health and safety standards, allowing the Company to export the flower to its international divisions.
Including this new agreement, 30 per cent of PharmHouse’s total flowering space has been committed to Canopy Growth.
“We have witnessed Canopy Rivers and its joint venture partner pour their hard work into the PharmHouse facility in Leamington and couldn’t be more satisfied with how it has turned out,” said Bruce Linton, Chairman & Co-CEO of Canopy Growth Corporation and Chairman & CEO of Canopy Rivers. “We expect the same for the flower quality that PharmHouse will be providing to Canopy Growth.
This is further evidence that the ecosystem model we had hoped for from Canopy Rivers is demonstrating its value and this new offtake agreement with PharmHouse speaks to how well we are managing our numerous assets.”
The vertically-integrated ecosystem sought by the Company for Canopy Rivers is its core differentiator. By keeping production within the ecosystem, Canopy Growth is able to leverage the anticipated throughput and low cost of production from the PharmHouse facility and in return receive a significant source of high-quality dried flower.
Deliveries to Canopy Growth from PharmHouse are expected to commence late in the second half of this year.