Canopy Growth announced Monday that it has agreed to acquire Québec-based MTL Cannabis in a transaction valued at approximately $125 million on a fully diluted equity basis, a deal the company says will significantly strengthen its position in Canada’s medical marijuana market while expanding high-quality flower supply for both domestic and international markets.
Under the terms of the arrangement, Canopy Growth will acquire all outstanding shares of MTL Cannabis, with MTL shareholders set to receive 0.32 of a Canopy Growth share plus $0.144 in cash for each MTL share they hold. The transaction implies a value of $0.91 per MTL share, representing a 45% premium over MTL’s 20-day volume-weighted average price as of December 12. The deal also includes the settlement of MTL’s debt and values the company at roughly $179 million on an enterprise value basis.
MTL Cannabis, founded by brothers Richard and Michel Clément, has built a reputation around premium indoor marijuana flower and has gained national recognition among retail staff. The company was named Canada’s top budtender-recommended brand in a 2024 industry study, a distinction Canopy Growth highlighted as central to the acquisition’s strategic appeal. Canopy plans to retain MTL’s core management team, including its cultivation leadership, to help elevate product quality and operational performance across its broader portfolio.
“MTL brings skilled operators, strong brands, and a profitable business that will strengthen our leadership in Canada’s medical market and deepen our presence in key adult-use markets, including Québec,” Canopy Growth CEO Luc Mongeau said in a statement. “Their cultivation expertise, combined with our national scale, positions us to improve product quality and expand supply.”
The transaction is expected to make Canopy Growth the leading medical marijuana provider in Canada by combining its existing patient base with MTL’s clinics, Canada House medical network, and its Abba Medix online medical platform. Canopy also intends to integrate MTL’s cultivation and post-harvest assets into its supply chain, increasing access to premium flower for export markets, including Europe, where demand for medical marijuana continues to grow.
Financially, Canopy described the acquisition as accretive, pointing to MTL’s reported $84 million in trailing twelve-month revenue, gross margins above 50% before fair value adjustments, and $11 million in operating cash flow. The company expects to generate approximately $10 million in annualized cost synergies within 18 months of closing, driven by operational efficiencies and corporate integration. Combined with Canopy’s ongoing cost-cutting efforts, the company said the deal supports its goal of achieving positive adjusted EBITDA.
MTL shareholders will also gain exposure to Canopy Growth’s broader international footprint, including operations in Europe and Australia, as well as indirect exposure to the U.S. market through Canopy’s interest in Canopy USA. Roughly 75% of MTL’s outstanding shares are already subject to voting support agreements backing the transaction.
The acquisition will be completed through a court-approved plan of arrangement and requires shareholder and regulatory approvals. Assuming those conditions are met, Canopy Growth expects the transaction to close before the end of February 2026.
