Canada’s medical cannabis market is seeing renewed consolidation as producers look to scale operations, improve margins and strengthen their balance sheets. The latest transaction highlights a push toward profitability while expanding access to global markets, particularly Europe.
BNN Bloomberg spoke with Luc Mongeau, chief executive officer at Canopy Growth, about the acquisition of Montreal-based MTL Cannabis, integration plans and how the deal supports the company’s path toward positive adjusted EBITDA.
Key Takeaways
- The acquisition underscores ongoing consolidation in Canada’s medical cannabis market as producers prioritize scale and operational efficiency.
- Adding MTL’s cultivation assets is expected to improve margins and accelerate progress toward positive adjusted EBITDA and cash flow.
- The deal strengthens Canopy Growth’s footprint in Quebec, a key market for medical cannabis growth.
- Expanded flower supply supports international medical markets, particularly Europe, where demand continues to rise.
- Retaining MTL’s operational leadership is intended to preserve product quality while scaling production across the platform.
Read the full transcript below:
ROGER: Canopy Growth agreed to acquire MTL Cannabis today. Canopy says the deal will expand its medical cannabis capacity and global market reach through the acquisition of the Montreal-based producer. The company expects the transaction to close in March and says it would elevate Canopy to a leading position in Canada’s medical cannabis market.Here to talk about that is Luc Mongeau, chief executive officer of Canopy Growth. Luc, thank you very much for joining us.
LUC: My pleasure. Thanks for having me.
ROGER: Why go after MTL?
LUC: For us, this transaction checks so many boxes. I’ve been at the head of Canopy for close to a year now, and with the team, we’ve been very focused on building the fundamentals of what can become a global leader in cannabis, both medical and recreational.The addition of MTL really accelerates our journey toward positive adjusted EBITDA, generating cash flow, and providing consumers and medical patients in Canada and across Europe with the best flower available.
ROGER: You mentioned negative EBITDA and cash flow. What changes with this deal? You were still reporting single-digit millions in adjusted EBITDA losses last quarter, I believe.
LUC: Yes, absolutely. This transaction is highly accretive. MTL is part of a select group of Canadian licensed producers that have achieved positive EBITDA and are generating positive cash flow.When you combine that with all the efforts we’ve put in place over the last year to control costs and strengthen our balance sheet, along with the fact that we’re growing our Canadian recreational business at about 20 per cent year over year and our Canadian medical business in the double digits, all of that accelerates our path to positive EBITDA and positive cash flow.
ROGER: The valuation is about $179 million, and MTL had roughly $84 million in trailing 12-month revenue and a 51 per cent gross margin. How do you underwrite that?
LUC: We focus heavily on the strategic side. The margins MTL generates are significantly better than ours today, although Canopy’s margins are improving.Access to a very lean operation and superior cultivation capabilities will allow us to improve margins across the combined business, and we expect to feel that impact all the way down to the bottom line.
ROGER: Did you consider doing this organically, or do you feel this was the better move?
LUC: This is the better move, although we’re still growing organically as well. Over the last 12 months, we’ve been unleashing the power of Canopy, which is why we’ve returned to strong growth — about 20 per cent in recreational and roughly 17 per cent in medical.This transaction simply accelerates how we position Canopy as a serious global player.
ROGER: On the global market, there’s been renewed attention on the U.S., including the potential for cannabis rescheduling. Are you prepared for that if it happens?
LUC: Absolutely. To really take advantage of that opportunity, Canopy needs to be extremely strong in Canada and Europe so we can build the capability to invest in the U.S. market.Right now, we have investments in Wana and TerrAscend, and we work closely with those teams by providing guidance and support. We believe we’re well positioned, but being strong in Canada, Europe and Australia is critical before the U.S. market fully opens up.
ROGER: How are things looking in Europe and Australia?
LUC: Those markets continue to grow very well, particularly Germany, which is expanding quickly. This acquisition gives us access to superior-quality flower that we can take into Europe and really unlock Canopy’s potential internationally.
ROGER: How do you plan to merge the two companies while preserving what makes MTL unique? You’ve talked about roughly $10 million in synergies over 18 months.
LUC: We’re building one company. This will be a full integration, with two organizations coming together.Our focus is on preserving MTL’s superior cultivation capabilities — high-quality flower, higher THC levels, and very efficient costs. That’s why MTL CEO Mike Perron will become our global chief operating officer and lead operations.It was also very important that MTL’s founders remain involved. They’ll play key roles in cultivation and manufacturing to ensure we retain the best of MTL while combining the strengths of both companies.
ROGER: Scaling quality can be difficult. How do you balance quality with growth?
LUC: This isn’t my first integration. We’re putting a very rigorous integration management approach in place and will phase this carefully.Growing great cannabis is both a science and an art, so we’ll move gradually. We have a high level of confidence that we can elevate quality across the entire network without compromising standards.
ROGER: Any concerns around regulatory approval or MTL shareholder support?
LUC: We’ve done our diligence and expect a smooth process.
ROGER: Luc, thank you very much for joining us.
LUC: Thank you. Have a great day.
ROGER: You too. That’s Luc Mongeau, chief executive officer of Canopy Growth.
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This BNN Bloomberg summary and transcript of the Dec. 15, 2025 interview with Luc Mongeau are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
