After an impressive month of growth in November, shares of Canopy Growth (NASDAQ:CGC) stock are ticking higher on Wednesday.
The move comes after BioSteel, a sports nutrition and hydration company, entered an agreement with the Philadelphia 76ers of the NBA to become the official sports drink of the franchise. The multi-year deal includes a number of different benefits, including a large amount of joint branding efforts.
So, what does all of this have to do with Canopy and CGC stock? Well, here are a few important points for investors to note:
- Canopy Growth purchased a 72% stake in BioSteel in October 2019.
- Additionally, the transaction gives Canopy Growth a path to 100% ownership.
- The goal was to give Canopy an entrance to the hydration and sports nutrition market.
- It also “lays the groundwork for the adoption of cannabidiol (‘CBD’) in future product offerings in accordance with regulations globally including products to be sold in the U.S. containing CBD sourced from federally permissible industrial hemp.”
Mark Zekulin, former CEO of Canopy Growth, said the following regarding the deal for BioSteel:
“This acquisition allows us to enter the sports nutrition space with a strong and growing brand as we continue towards a regulated market of food and beverage products that contain cannabis. We view the adoption of CBD in future BioSteel offerings as a potentially significant and disruptive growth driver for our business.”
Moreover, the details of the BioSteel announcement include “prominent” branding at all 76ers home games and the team’s training facility. The brand will also be featured in specific content and interviews.
CGC stock was up 6% as of Wednesday morning.
On the date of publication, Nick Clarkson did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Nick is a web editor at InvestorPlace.