Canopy Growth (CGC 4.72%) ended the week on a high, rising to close up 5.4% on Friday thanks to a court decision in Canada approving a corporate divorce, complete with a settlement.
On Thursday, Canopy Growth's partner and near-namesake, venture capital firm Canopy Rivers (CNPO.F 8.21%), won approval from the Ontario Superior Court of Justice for an agreement separating the two companies.
Rivers was a subsidiary of Canopy Growth, although it was publicly traded as a separate entity.
Last December, the two agreed to separate entirely. Under the terms of this arrangement, Rivers will transfer its stake in marijuana company TerrAscend and greenhouse manager Les Serres Vert Cannabis to Canopy Growth. Already a shareholder, Canopy Growth's stakes in the two companies will rise to 21% and 67%, respectively.
In return, Canopy Growth is paying Rivers around CA$115 million ($91 million) in cash, plus roughly 3.65 million shares of its common stock. It's also canceling both its multiple and subordinate voting shares in the VC. It will no longer be a shareholder in Rivers, which is changing its name to RIV Capital.
Rivers' shareholders ratified the move earlier this week.
In sum, Canopy Growth bolstered its investment in two companies while fully letting go of its VC. This should help the company streamline and focus its operations on its core competency -- producing and selling marijuana products.