The Supreme Cannabis Co. announced on July 17 that they have entered into a definitive agreement to acquire privately-held Truverra in an all-stock deal. In return, Truverra will receive 14.7 million shares of Supreme, valuing the company at $20 million.\r\n\r\n\r\n\r\nSince the announcement, shares of Supreme have risen 8% as of market close today, reaching gains as high as 14% mid-day. Investors clearly like the deal \u2014 here's why.\r\nValue Extracted from Truverra\r\nTruverra is a Toronto, Ontario based company focused on the development, production, and marketing of cannabis-derived medical products. They have two wholly-owned subsidiaries: Canadian Clinical Cannabinoids (CCC) and Truverra Europe.\r\n\r\nTheir CCC facility is a 5,000 sq. ft. Health Canada licensed research and extraction facility. Supreme intends on refocusing CCC to produce high-quality concentrate and vape extracts. Their European branch is located in the Netherlands and is focused on producing hemp-based CBD products.\r\nSupreme Position for Success\r\nUltimately, this is a prudent move by Supreme before cannabis Legalization 2.0 (edibles and extracts). Utilizing Truverra's extraction expertise allows them to focus on what they do best \u2014 growing exceptional product. With Supreme's high-quality flower as an input, you can expect the final product to be equally as impressive.\r\n\r\nThis also provides Supreme with exposure to the European CBD market. With Truverra's heavy medical focus, the backstop of research results they have gathered is very valuable. Supreme sees the Truverra acquisition as a key component of their global medicinal cannabis strategy.\r\n\r\nThe deal is expected to close before the end of August upon approval from Truverra shareholders. Given Truverra is a private company, it seems unlikely there will be any challenges closing the deal. It's clearly a solid opportunity for both companies.