Canadian Lawyer InHouse

June/July 2021

Legal news and trends for Canadian in-house counsel and c-suite executives

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www.canadianlawyermag.com/inhouse 23 "Personal meetings build a sense of trust and connection, so, without that, the deals did drag on a little bit longer." David Felicissimo, Valsoft Corp. acquisitions," says Sam Carsley, senior director, legal and assistant corporate secretary at the Smith Falls, Ont.-based company. Canopy Growth recently acquired The Supreme Cannabis Company Inc. and Ace Valley to diversify and expand its offerings. "We're looking to see where we can position ourselves from a strategic standpoint. While the first phase of cannabis legalization was a bit of a frenzy of acquisition, now I think we have the opportunity to be a little bit more thoughtful," says Carsley. The $435-million acquisition of Supreme Cannabis strengthens Canopy's brand portfolio with the 7ACRES premium brand. Supreme Cannabis' Blissco and Truverra brands also add breadth to Canopy's market presence in recreational and medical markets. Phil Shaer, Canopy Growth's chief legal officer, expects M&A activity in Canada to slow down for the remainder of the year. The two recent acquisitions will close gaps in the company's portfolio and position it very well in the market. However, activity may increase in the U.S., he says. "The U.S. is coming, and it's coming super fast. I do anticipate us trying to do more transactions in the U.S. in the short term because owning another great brand in the U.S. — maybe an edible brand — could be of value to us so we could port it over to the Canadian market and build up the American market as well," says Shaer. Canopy Growth already has an option to acquire 70 per cent of U.S. brand Acreage Holdings in a deal that closed in 2019 and was modified in 2020 to reflect declining company valuations. Gorka expects deal volumes to continue for the foreseeable future, based on the high number of calls his firm receives from clients. At Valsoft, activity has remained strong in the first half of 2021 with recent acquisitions for the Montreal-based company including Vertical Software Inc. and Datastor Systems Ltd. Felicissimo anticipates a continued strong market in the second half of 2021, driven by competition in the space and a low interest rate. "If you take a look at the deals in our pipeline, it's already more than we closed all of last year. Once the borders reopen and travel starts up again, we'll see even more development and more deal flow," he predicts. "Some people think business travel in the world of M&A is going to change permanently, but I think we really need face-to-face meetings in terms of building trust and also in terms of negotiating" constructively, says Felicissimo.

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