Oct 14 Reuters - Canada's Canopy Growth Corp said on Thursday it will buy the weed drink maker Wana Brands for $297.5 million, as the world's biggest pot producer looks to expand in the U.S. cannabis market.
Demand for cannabis - related products like gummies has risen during the pandemic, as people stuck at home turn to pot-related products for relaxation and entertainment.
The categories which resonate the most with consumers, particularly in canopy space are gummies and beverages; we continue to look at other ways of consumption but these two seem to be the ones that are taking off, Canopy CEO David Klein told Reuters.
Tetrahydrocannabinol or THC is the active drug in marijuana that gets you 'high'.
Wana sells gummies in the U.S. state of Arizona and licenses its intellectual property to partners who manufacture, distribute and sell Wana-branded gummies in states including California, Arizona, Illinois, Michigan and Florida.
Canadian pot producers are looking at cross-border expansion, as the industry has garnered investor interest with some U.S. states legalizing marijuana and on better expectations for federal marijuana reform.
We remain bullish than others on the regulatory front and feel that our ecosystem is strong enough to grow even without federal permissibility happening in the short term, Klein added.
The U.S. stocks of Canopy rose nearly 2% to $13.55 in premarket trade, down 46% so far this year.
The acquisition will provide Canopy access to Wana's vertically integrated facility in Colorado and its licensing division, the company said, adding that it would continue operating independently in the state until the deal closes.
The transaction is structured as three separate option agreements, allowing Canopy Growth to acquire 100% of the membership interests in each Wana entity, the company said in its statement.