Canopy Growth, whose U.S. footprint currently spans 21 states, announced plans to accelerate its entry into the U.S. market. It will expand its portfolio to include the purchase of multi-state operator Acreage Holdings, California-based extractor Jetty Extracts, and edibles maker Wana Brands. The company plans “to unleash the full power of Canopy in the U.S. cannabis ecosystem.”
Last week, Canadian cannabis company Canopy Growth announced plans to accelerate its entry into the U.S. market. The company said it was consolidating its U.S. assets into a new company, Canopy USA.
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Canopy Growth Expands U.S. Portfolio
Canopy’s U.S. portfolio will include the purchase of multi-state operator Acreage Holdings, California-based extractor Jetty Extracts, and edibles maker Wana Brands.
Canopy Growth had initially agreed to buy the latter once U.S. federal law had legalized cannabis. However, Canopy decided not to wait for U.S. federal legalization.
Canopy Growth Seeks to “Take Control” of its Destiny
David Klein, Canopy Growth’s CEO, said the strategy will allow the company “to take control” of its destiny “and to capitalize on the unique opportunity presented by the world’s largest cannabis market.”
“We plan to unleash the full power of Canopy in the U.S. cannabis ecosystem to unlock potential expansion opportunities. This strategy and positioning are true differentiators that we believe will allow our investors and brands to realize near-term value while positioning Canopy for profitable growth and a quick startup upon receipt of U.S. federal approval,” David Klein explained in a press release.
The deal could take a year and a half to complete. However, the time span depends on the necessary approvals from the U.S. economic authorities and the various boards of the companies to be acquired.
Constellation Brands to Take a More Passive Role
Constellation Brands, the spirits giant that put more than $4 billion into Canopy, said it plans to return to a more passive, non-voting role. The liquor maker will retain its current stake but will no longer be allowed to appoint representatives to Canopy’s board or approve certain transactions. It also will not have the right to review Canopy’s financial results.
“This transaction and the relinquishment of our warrants should eliminate the impact on our earnings interest, mitigate the risk to our organization, and reinforce our intention not to deploy additional investments in Canopy, consistent with Constellation’s previously stated capital allocation priorities,” said Bill Newlands, Constellation’s president and chief executive officer.
Canopy Growth Footprint Spans 21 U.S. States
Collectively, Canopy Growth’s footprint currently spans 21 U.S. states, including Arizona, Arkansas, California, Colorado, Connecticut, Florida, Illinois, Maine, Maryland, Massachusetts, Michigan, Missouri, Nevada, New Hampshire, New Jersey, New Mexico, New York, Pennsylvania, Ohio, Oklahoma, and Oregon.
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