Canopy Growth Corp (NYSE: CGC) said Wednesday it completed a transaction to acquire Canada-based KeyLeaf Life Sciences, a bio-product extractor company.

What Happened

Canopy and KeyLeaf worked together to build out an extraction process and related technology. The partnership was intended to refine Canopy's scale extraction model for the Canadian and global markets.

Canopy assumed control of KeyLeaf for accounting purposes in late 2018 and Wednesday's agreement will see Canopy assume related entities and intellectual property. In addition, Canopy will also acquire a U.S.-based extraction facility, which will be used for Canopy's CBD expansion in the U.S. market.

See Also: Canopy Growth CEO Looks To The 'Pharmaceutical World' After String Of M&A Deals

Why It's Important

KeyLeaf boasts 45 years of experience across multiple bio-product industries and the company's chemists, engineers, and operators will stay with the organization under a new owner. Canopy co-CEO and Chairman Bruce Linton said the acquisition brings "instant scale at a pivotal stage" in the company's growth.

"This acquisition is the result of a year's worth of work with a trusted partner, and part of our commitment to always staying a step ahead as leaders in a nascent industry, focused on the long-game one piece at a time," Linton said in a press release.

Canopy said it will leverage the acquisition along with other partners to process over 5,000 acres of Canadian CBD hemp production, more than 160 acres of outdoor cannabis production, and extraction materials outputted from more than four million square feet of greenhouse growing operations.

Canopy Growth shares closed Tuesday at $39.77.

Need more cannabis news? Check out all of our coverage here.