Canopy Growth to acquire Wana Brands in a $ 300 million deal

Canopy Growth Corporation, the cannabis industry leader, announced that it has signed an agreement to acquire Wana Brands, the continent’s largest cannabis edible brand by market share, valued at nearly $ 300 million. Under the terms of the agreement, Canopy has secured options to purchase Wana and its affiliates once THC products become federally legal in the United States.

“As we establish Canopy Growth as the world’s leading cannabis company, acquiring the leading cannabis edibles brand in North America will help strengthen our market position in both Canada and the United States,” said David Klein, CEO of Canopy Growth. in a press release.

“The right to acquire Wana will secure another major, direct route into the US THC market upon federal approval, and in Canada we will be adding the premium cannabinoid gums to our industry-leading brand house. We are confident about the future growth of the grocery category and the tremendous opportunities with Wana. “

The agreement grants Canopy Growth the right to acquire 100 percent of the outstanding membership interests in Wana Brands and its affiliates Mountain High Products, Wana Wellness and The Cima Group, provided THC is federally legal in the US market.

If the option is exercised, Canopy Growth will make an additional payment equal to 15 percent of the fair value of each company at the time of acquisition. The two companies will continue to act independently of one another until the options are exercised.

Deal will bring together two big players

Wana manufactures and sells cannabis gums in Colorado and licenses its intellectual property to partners who manufacture cannabis edibles in 11 other states, including California, Arizona, Illinois, Michigan, and Florida, and across Canada.

Canopy Growth is a Canada-based cannabis and cannabinoid consumer products company that provides a range of regulated marijuana products to adult consumers through its Tweed and Tokyo Smoke branded pharmacies in Canada. The company also operates the medical brand Spectrum Therapeutics, which is the market leader in both Canada and Germany.

In the United States, Canopy Growth offers hemp-based CBD products through health and wellness brands First & Free and Martha Stewart, giving the company a global presence in cannabis and cannabis products. In addition, Canopy Growth announced an agreement in 2019 that gives the company the right to acquire US multi-state cannabis operator Acreage Holdings. Canopy Growth also has a conditional interest in TerraAscend, another US MSO.

The addition of Wana Brands to its portfolio offers Canopy Growth several strategic advantages, including strengthening its access to the US market. The deal capitalizes on Wana’s leadership position and continued expansion in the US, where it has the largest multi-market presence of any independent cannabis edible brand.

If Canopy exercises the option, it will own and operate Wana Colorado’s vertically integrated manufacturing facility and licensing division, which currently has business in 11 states and plans to cover more than 20 states by the end of 2022.

The acquisition will also give Canopy Growth a strong position in cannabis gums, which is one of the fastest growing segments of the Canadian and U.S. grocery markets and accounts for 71 of all groceries purchased, according to Headset.

“Edibles play a key role in attracting new consumers, and the addition of the leading grocery brand in North America strengthens our competitive position on both sides of the border,” Klein said in an interview with Forbes. “In addition to our existing relationships with Acreage and TerrAscend, the agreement with Wana strengthens Canopy’s position for rapid entry into the US THC market after approval.”

Nancy Whiteman, Co-Founder and CEO of Wana Brands, said the announcement of the deal with Canopy Growth “reflects the culmination of more than a decade of hard work, dedication and vision that our people and partners have shown, as well as an unwavering commitment to the work and – our customers.”

“We have pondered what the next phase of our growth might look like and this deal is great testament not only to our focus on earnings growth and fiscal diligence, but also to the value we believe Wana will bring to Canopy and its companies can. “Shareholders now and in the future,” said Whiteman.

“We have met a lot of partners in the past 11 years, but none of them have felt the best and most suitable to this day. We are incredibly humble and honored to be part of what Canopy Growth is building for the future of this industry. “