Canopy Growth announces planned acquisition of North American edibles brand

Canopy Growth announces planned acquisition of North American edibles brand

The cannabis company will purchase Wana Brands once a few more hurdles are jumped

An investment of nearly $300 million seems to be a good strategy for the giant Canadian cannabis operator to start getting a good share of the edibles market. Canopy Growth is formalizing the final paperwork to acquire the number one cannabis edibles brand in North America by market share, Wana Brands. This seems like a pretty smart move, especially since the edibles market is starting to boom quite a bit.

According to what is known so far, this deal is quite similar to the one Canopy signed with Acreage Holdings a couple of years ago. The deal provides that the Canadian operator will have the opportunity to acquire the right to purchase Wana once THC becomes approved under the country’s federal framework. It is not yet known how soon this may happen; however, recent legalization moves appear to be quite positive.

Canopy will have the opportunity to purchase 100% of the membership interests in each Wana entity. In order for that to happen, the company must make an upfront cash payment of a modest $297.5 million. At the time Canopy decides to move forward with the acquisition, it will proceed to make a payment of 15% of the fair market value of the entities to be acquired. Until the acquisition is formally completed, it was intended that Canopy Growth would have no economic, voting, or controlling interest in Wana, which for the time being would continue to operate independently.

“Through the agreement with Wana, Canopy is adding another industry-leading brand to power our rapid growth across the U.S. Wana has built a successful business using an asset-light licensing model, allowing them to scale across North America,” David Klein, CEO of Canopy Growth, said in an exclusive interview.

Through this acquisition, Klein explained that the company would gain tremendous benefits, including increased exposure in one of the fastest-growing segments of the US and Canadian cannabis markets: edibles. It would also undoubtedly strengthen Canopy’s US ecosystem, not to mention that the company would definitely become a leader in the edibles category.