The firms announced on Tuesday that Canopy Growth Corp. had reached an agreement to acquire a small investment in Canadian sweets manufacturer Indiva Ltd. in addition to taking over the marketing and distribution of its Wana brand of cannabis-infused gummies.
For $2.1 million, Canopy announced that it would buy a 19.99 percent stake in Indiva, a company based in London, Ontario. The two companies also agreed to a five-year contract manufacturing agreement that will allow Indiva to continue producing and supplying Wana-branded goods in Canada with an additional five-year option after the initial licensing agreement expires.
The Smiths Falls, Ontario-based cannabis business initially disclosed an agreement to purchase call options to buy Wana Brands in October 2021 for US$297.5 million in cash, which would be exercised when marijuana is legalized in the United States. The Canadian marketing and distribution rights for Wana goods belonged to Indiva before today’s announcement.
With a well-known brand in both the United States and Canada, Wana is one of North America’s largest producers of cannabis-infused gummies. Wana is the leading edibles brand in Canada, according to industry data aggregator Hifyre, with an approximately 12% market share. The company is also present in 14 American states and Puerto Rico. While adhering to Nasdaq listing standards, Canopy is aiming to combine its American investments, including Wana, Acreage Holdings, and Jetty Brands into a Canopy USA subsidiary.
David Klein, the chief executive officer of Canopy, said in a statement that the agreement with Indiva will boost the company’s earnings right away and contribute to its plan to produce cannabis with few assets.
By more closely integrating our ownership of Wana across North America, Klein said in a statement, “We expect to accelerate the introduction of product innovation in Canada that has already proven enormously popular in the United States.”
Additionally, Canopy had a turbulent week before the deal. The company disclosed yesterday that it had asked S&P to withdraw its credit ratings as a result of changing the terms of one of its outstanding loans. Additionally, the company announced that it had voluntarily submitted a management cease trade order as it worked to correct several financial statements from 2022 that had been submitted with incorrect sales data for its BioSteel sports performance drink business unit. Canopy had planned to announce its most recent financial results today, but a company representative said the business will first publish its updated 2022 statements before announcing its fiscal year-end numbers.
