Canopy Growth has reached deal to buy leading gum maker if US makes pot legal

Canadian businesses are looking for ways to penetrate the larger, high-growth U.S. market

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Canadian cannabis company Canopy Growth has made a deal to buy a US maker of marijuana candy – but only if marijuana becomes federal legal in the US

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The deal gives Canopy an option to purchase all of the Boulder, Colorado-based Wana brands for US $ 297.5 million in advance cash and other provisions that will pay the company 15% of its market value at the time. of the transaction, according to a statement. . Canopy may make additional payments on 2.5 and 5 year anniversaries of the transaction.

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Canadian companies are looking for ways to enter the larger, high-growth U.S. market, but they still face the daunting barrier that marijuana remains federally illegal and cannot be imported. Canopy has entered into similar agreements with Acreage Holdings Inc. and TerrAscend Corp.

“The right to acquire Wana secures another direct and major route to the US THC market under federal approval,” Canopy chief executive David Klein said in a statement. “And in Canada, we’ll be adding the top-ranked cannabinoid gummies to our house of industry-leading brands,”

Wana sells products in Canada and 12 states in the United States, in part through licenses of its intellectual property. Its gummy candies are available in flavors such as watermelon, blueberry, and mango, and include THC, the psychoactive compound in marijuana.

The agreement includes affiliated entities, Mountain High Products LLC and The Cima Group LLC.

Cassels Brock & Blackwell LLP is acting as Canadian legal counsel and Paul Hastings LLP is acting as US legal counsel to Canopy in connection with the transaction. Bryan Cave Leighton Paisner LLP is legal counsel to Wana.

Bloomberg.com


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Virginia C. Taylor

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