Canopy Growth enters into an agreement for the sale of Hershey Drive facility in Smiths Falls
by CM staff
Canopy Growth will retain its Smiths Falls-based post-harvest manufacturing facility.
SMITHS FALLS — Canopy Growth Corporation has entered into an agreement to sell its Hershey Drive facility in Smiths Falls, Ontario, as part of the company’s transformation to a simplified, asset-light operating model.
Pursuant to the terms of the agreement, the facility will be sold to Hershey Canada, Inc. for cash consideration of approximately CAD$53 million. The completion of the transaction is subject to customary closing conditions.
“We are pleased to have reached an agreement with Hershey on this important sale. This is the latest milestone in our focused effort to reduce costs and further enhance our balance sheet,” said David Klein, Chief Executive Officer of Canopy Growth. “Each of the steps we have taken as part of our transformation to a simplified, asset-light operating model supports our ability to deliver in-demand products from brands our customers love, with greater agility and less execution risk. Once again, we have demonstrated Canopy Growth’s ability to achieve significant organizational and operational change to position the Company for future growth in the Canadian market.”
The sale of the facility follows the centralization of post-harvest manufacturing at the company’s former beverage facility in Smiths Falls, as well as the consolidation of all flower cultivation in the Company’s purpose-built sites in Kincardine, Ontario, and Kelowna, British Columbia.
“Our intent to purchase the Hershey Drive property in Smiths Falls is another example of the strategic investments we’re making in our supply chain network and our Canadian operations to support growth,” said Jason Reiman, Chief Supply Chain Officer, The Hershey Company.
Upon the completion of the Transaction, Canopy Growth will have sold a total of seven properties for an aggregate gross amount of approximately CAD$155 million since April 1. Net proceeds received from the sale of the facility will be used primarily to pay down the company’s senior secured credit facility.
