Canopy Growth Corp. is paying Wana Brands $297.5 million for the right to purchase 100% of its stock after marijuana is legalized in the United States. When the option to buy the company is available after legalization, the price tag likely will be around $1 billion.
Wana manufactures and sells gummies in Boulder, Colorado, and licenses its intellectual property to partners that manufacture, distribute, and sell its gummies in 12 US states and Canada. The company expects to have license agreements in place in more than 20 US states, including in future adult-use markets in New York and New Jersey, before the end of 2022.
Based in Ontario, Canopy Growth is a leading diversified cannabis and cannabinoid-based consumer product company that offers flower, oil, soft-gel capsules, infused beverages, edibles, and topicals as well as vaporizer devices. Wana’s leadership position and ongoing expansion should bolster the Canadian company’s product offerings, brand, and geographic exposure in the United States.
“As we establish Canopy Growth as the world’s leading cannabis company, acquiring the No. 1 cannabis edibles brand in North America will serve to strengthen our market position in both Canada and the United States,” Canopy Growth CEO David Klein said. “The right to acquire Wana secures another major, direct pathway into the US THC market upon federal permissibility, and in Canada we’ll be adding the top-ranked cannabinoid gummies to our industry-leading house of brands. We’re confident in the future growth of the edibles category and the tremendous opportunities with Wana.”
The gummies category is one of the fastest-growing cannabis segments in both the US and Canadian markets, accounting for more than 65% of all edibles purchased in August of 2021, according to BDSA. Wana is the leading cannabis edibles brand in North America based on market share, with the largest multimarket presence of any independent edibles brand in the US gummy market and the No. 1 share of the Canadian gummy market.
Wana has a profitable business with a track record of generating strong revenue growth. Its licensing model provides an opportunity to scale the brand ahead of US legalization.
“We have long considered what the next phase of our growth might look like, and this deal is not only a great testament to our focus on bottom-line growth and fiscal diligence but also to the value we believe Wana can bring to Canopy and its shareholders now and in the future,” Wana Brands CEO and Co-Founder Nancy Whiteman said. “We have met many partners along the way over the past 11 years, but none have felt like the best and right fit until today. We are incredibly humbled and honored to be part of what Canopy Growth is building in terms of the future of this industry.”