Canopy Growth Corp (NYSE:CGC) recently announced that it finalized its acquisition of Cafina, a licensed cannabis producer that is based in Spain in an all-cash deal.

The acquisition marks a key milestone for Canopy Growth because it represents an opportunity to tap into the European cannabis market. Cafina which also goes by the name Cáñamo y Fibras Naturales, S.L is one of Europe’s companies that have acquired a license to produce cannabis. Cannabis Growth will use the European firm to expand its marijuana production activities in a region that is considered among the best for cannabis growth.

Canopy Growth acquires Cafina

Cafina is based in Spain where it is licensed to cultivate and distribute cannabis that contains over 0.2% of the 0.2% of tetrahydrocannabinol (THC) chemical. The firm’s products are mainly used for research and medical purposes and are even exported to other countries and it also has a license to. Cafina runs its production activities in a greenhouse that measures 1,600 sq. ft. Canopy Growth has also secured a supply agreement with another Spanish-company that produces cannabis flowers.

Cafina came into existence in 2014 and its operations are based in the Alicante province in Spain. It has a strong team that is focused on crop R&D, hemp seed sales and cannabis production. It received its research and general license for cannabis from the Spanish Agency for Medicines and Health Products (AEMPS) in November last year.

“Operating multiple production assets within Europe will allow us to increase revenue in the EU free of supply constraints,” stated Canopy Growth CEO, Mark Zekulin.

The CEO also noted that his company is investing in low-cost and scalable production facilities of the two European countries. According to Zekulin’s announcement, it is a strategic acquisition because it aligns with the strategy that the company uses in Canada where it has cannabis production facilities distributed across seven different provinces.

Canopy Growth is one of the most successful companies in the cannabis and hemp industry. Its stock grew by 79% in 2018 and the announcement about the Cafina acquisition influenced the stock to surge by more than 4%.