Canada's Canopy Growth to buy rival Supreme Cannabis as pot demand lights up

FILE PHOTO: A sign featuring Canopy Growth Corporation's logo is pictured at their facility in Smiths Falls, Ontario, Canada, January 4, 2018 .

Shares of Canopy, up 15% this year, fell around 4.6% to C$36 after it announced the cash-and-stock deal for Supreme, which owns pot brands including 7ACRES and Blissco.

The opening of more retail stores and a rise in weed use during the pandemic has brought back investor dollars for cannabis producers after years of underperformance.

Canopy will continue to push for a higher share of the Canadian market while it prepares for a U.S. entry, Chief Executive David Klein told Reuters.

“We’re a Canadian company... we’re going to use Canada as that kind of solid home base for us to be able to then bring our capabilities and our brands into the U.S. market as it opens,” Klein said in an interview.

The Supreme deal makes Canopy the owner of four out of the top ten cannabis brands in Canada, with an estimated 13.6% of the total recreational market share in the country, the companies said.

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