Canadian cannabis operator Canopy Growth Corporation has entered a definitive agreement to acquire cannabis edibles maker Wana Wellness for $297.5 million, which will go into effect upon federal legalization of THC in the U.S.
Based in Colorado, Wana produces THC- and CBD-infused gummies and tinctures at its vertically integrated production facility for sale in its home state, and licenses its brand and formulations for production in 11 additional states and Canada, with plans to expand into new markets, including New York and New Jersey, by the end of next year.
The acquisition fits with Canopy’s strategy of building its U.S. business interests in anticipation of cannabis becoming federally legal at some future date. The company spent $3.4 billion to purchase the rights to acquire Acreage Holdings in 2019 and increased its ownership stake in TerrAscend Corp last year, providing it with the infrastructure to immediately establish itself within the U.S. once legalization occurs.
“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,” said Canopy CEO David Klein in a press release. “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.”
Canopy, which is based in Ontario and is 38% owned by Constellation Brands, has recently worked to increase its share in the U.S. hemp and cannabis market, including a recent partnership with Southern Glazer’s Wine & Spirits to distribute its CBD beverage portfolio and earlier this month partnering with Karma Water to produce a CBD-infused line.
The conglomerate has also been an active acquirer of brands, spending more than $4.3 billion on acquisitions as of August 19, including recent moves to buy Canadian cannabis producer Supreme and Ontario-based Ace Valley. In 2019, Canopy took a majority stake in sports nutrition and beverage manufacturer BioSteel.
According to the release, Wana Wellness will give Canopy an additional arm in the fast growing gummies category. Citing data firm Headset, Wana is the leading gummies brand in the U.S. and Canada by market share, a category that makes up 71% of all edibles purchased in both countries.
“Today’s announcement reflects the culmination of more than a decade of hard work, dedication and vision put forth by our employees and partners, as well as an unwavering commitment to the plant and our customers,” said Wana CEO and co-founder Nancy Whiteman in the release. “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.”