Today, October 14th, two industry-leading cannabis companies entered a definitive agreement that has certainly raised some eyebrows. Canopy Growth, one of the largest cannabis companies in Canada, and Wana Brands, the #1 weed edible brand in the U.S., have announced that the Canadian giant will be acquiring the latter.
Canopy Growth x Wana Brands
Including Mountain High Products LLC, Wana Wellness LLC, and The Cima Group LLC, all Wana Brand entities are included in this acquisition. Canopy Growth presented the edible brand with an upfront cash payment of $297.5 million.
This “purchase” is more of an agreement at this point, though. Under the agreement, Canopy Growth acquires the right to purchase Wana once THC becomes federally legal in the United States. This is similar to their agreement with Acreage Holdings.
When acquisition time comes, Canopy Growth will pay 15% of the fair market value. In the meantime, Wana will continue to operate independently.
Image via @wanabrands on IG
David Klein, the CEO of Canopy Growth, states, “As we establish Canopy Growth as the world’s leading cannabis company, acquiring the #1 cannabis edibles brand in North America will serve to strengthen our market position in both Canada and the United States.”
He continues, “The right to acquire Wana secures another major, direct pathway into the U.S. 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.”
So Why Does This Raise Eyebrows?
As mentioned earlier, Wana is the #1 cannabis edible company in the United States. While Canopy Growth is also an industry leader, they certainly don’t hold the same respect that Wana does.
Amongst their many celebrity collaborations, two of their largest have called it quits this year. In June, Drake parted ways with the cannabis giant. Seth Rogen’s Houseplant was the next to follow suit. But why?
Though neither gave completely transparent reasons, Michael Mohr, the CEO and co-founder of Houseplant stated, “The recent launch of Houseplant in the United States has given us a clear benchmark for what Houseplant stands for, and how we plan to bring the brand to life globally.” With this statement, and the fact that their U.S. products are sourced from other suppliers, it may be speculated that the Houseplant cannabis products offered in Canada haven’t lived up to the standards of the products produced in the states.