Centric Health Corporation (TSX:CHH) announced Wednesday that it has entered into multi-year supply and service agreements with Canopy Growth Corporation (TSX:WEED, NYSE:CGC) for the provision of medical cannabis.
Canopy Growth will be the preferred education partner and supplier of choice of medical cannabis primarily through its Spectrum Cannabis brand to Centric Health and the seniors that it serves both in long-term care and retirement residences, as well as seniors living in the community.
"We believe that our partnership with Centric Health will help reduce many of the existing gaps in the continuing care space by having a trusted partner at our side who can provide education, assist in policy development and, most importantly, provide clinical pharmacist oversight of medical cannabis through medication management," said Mark Zekulin, president and co-CEO of Canopy Growth. "The continuing care space is comprised of a patient population that can greatly benefit from the therapeutic effects of medical cannabis."
As part of a separate business development agreement, Canopy Growth will advance funds to Centric Health to educate clinical pharmacists, as well as other healthcare partners, residents and seniors and their families, on the benefits and potential applications of medical cannabis.
In exchange, Centric Health issued 850,000 warrants to Canopy Growth at an exercise price of C$0.25 per common share for a life of 48 months with the vesting date set at September 4, 2020.
"Our strategic relationship with Canopy Growth leverages Centric's national specialty pharmacy footprint and respected clinical pharmacists with their sophisticated educational platform and range of medical cannabis products, including the Spectrum Cannabis line that makes it easy for seniors to understand the strength and dosage of the medical cannabis they are using as part of their treatment program," said Centric Health CEO David Murphy.
Murphy said the partnership would ensure seniors and home operators would have the “best possible support” and oversight for medical cannabis treatments.
READ: Canopy Growth to increase growing capacity after receiving amended licenses from Health Canada
Cowen analyst Vivien Azer, a senior research analyst in the beverage, tobacco and cannabis sectors, reiterated an Outperform rating and raised the company’s price target to C$74 from C$56 on Tuesday.
Azer expects the US$4bn cash infusion from Constellation Brands, the maker of Corona beer, to give Canopy Growth a head start in international markets.
Shares of Canopy Growth were down 2.2% to US$51.34 in the New York stock Exchange and 2.4% to C$67.15 in the Canadian stock exchange.
Contact Uttara Choudhury at [email protected]
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(Updates with additional quotes from company officials, business development pact)