Canadian Lawyer InHouse

SEPTEMBER 2017 44 INHOUSE I n a small town about 40 minutes outside Ottawa, Phil Shaer has been putting to- gether some of the biggest deals in the high- stakes world of the cannabis industry. The publicly traded Canopy Growth Corp., formerly Tweed Marijuana Inc., op - erates, somewhat ironically, out of 1 Her- shey Drive in Smiths Falls, Ont. As renova- tions take place to expand the operation for cannabis production, some elements of the former chocolate factory, such as a big Her- shey sign in a meeting room, remain. Canopy is worth about $1 billion and the former production facility has more than half a million square feet of indoor and greenhouse production capacity. Shaer has been the GC and vice presi - dent of human resources at the company that has had one of the busiest deal pipelines in the past 12 months. It has been a time of unprecedented growth and activity for both Canopy and the marijuana industry in Can - ada. As Shaer reflects on often, the company is taking what was once an illegal substance into the mainstream of Canadian society. In 2016, Canopy had a groundbreaking year of deal making, led by Shaer and his small internal legal team that consists of Cailey Greenberg and Donna Henderson, both of whom came through acquisition of other cannabis companies. "Overall, the philosophy is if we can do it in-house, that's the deal," says Shaer. "We need to be super-nimble, in part because the law isn't figured out and to be honest, it's a bit of the Wild West. Add to that the fact this company and the whole cannabis space is helping to drive a societal change. How often do you get a chance to be in - volved in that?" Shaer says the challenge is thinking of different ways of getting to capacity wheth- er it's joint ventures or offtake agreements — he says it's a matter of always thinking of another way to get the deal done while also keeping an eye on what competitors are doing. "Canopy is the front-runner, so it's about staying the front-runner," he says. "Obviously, costs are an issue; we are, not withstanding being worth over $1 billion, essentially still a startup, which sounds cra - zy, but it's true. But the way I look at things and the way my team looks at it is where we add the biggest value is that we understand this business." Two deals in particular highlight a year of growth for the company. On Jan. 31, Can - opy completed the acquisition of Mettrum Health Corp. — its biggest competitor — for $430 million. The acquisition made Canopy one of the largest producers of marijuana in the world. "The biggest issue in our space right now is capacity, so a huge way of improving that is acquisition. We wanted their existing pa - tients," explains Shaer. On June 28, 2016, Canopy announced the closing of a joint venture agreement with São Paulo-based Entourage Phyto- lab S.A. This saw Canopy's wholly-owned subsidiary Bedrocan Canada Inc., Bedrocan International BV and local Brazilian part- ners create a new company called Bedrocan Brazil S.A. to facilitate the importation of Bedrocan's proprietary standardized canna- bis varieties into the Brazilian market. It was an international joint venture that brings Bedrocan's cannabis genetics to patients in a market with a population in excess of 200 million. "We move fast. The pace here is like nothing I've ever experienced in my career," says Shaer. "The way my team approaches these deals is we're adding the business sense to it. We know the business concerns we have about an acquisition and know what we want to get in terms of ROI. Are we do - ing the heavy lifting around drafting of the documents? No, we're relying on the La- Barge Weinsteins, Cassels Brock and Ben- nett Joneses of the world to do those types of things. But we are making sure the busi- ness parts of the deal make sense." Through the involvement of the in- house team in each of the deals, "tens of thousands in billings were saved," but it also ensured the in-house team could focus on the business and people side of the transac - tions — resulting in earlier and easier post- closing integration of acquired assets and resources. IH COLIN ROWE Leading Canopy Growth's deal strategy By Jennifer Brown Category: In-house Dealmakers Department: Small Company: Canopy Growth Corp. Phil Shaer, general counsel and vice president of human resources.

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