Canopy Growth Announces Plan to Acquire Wana Brands, the #1 Cannabis Edibles Brand in North America

Transaction Strengthens Canopy Growth's U.S. Ecosystem and Increases U.S. Cannabis Market Exposure Upon Federal Permissibility

Canopy Growth Corporation ("Canopy Growth" or "the Company") (TSX: WEED) (NASDAQ: CGC) and Mountain High Products, LLC, Wana Wellness, LLC and The Cima Group, LLC (collectively, "Wana" and each, a "Wana Entity") are pleased to announce that they have entered into definitive agreements (the "Agreements") providing Canopy Growth with the right, upon federal permissibility of THC in the U.S., to acquire 100% of the outstanding membership interests of Wana, the #1 cannabis edibles brand in North America by market share.

Wana manufactures and sells gummies in the U.S. state of Colorado and licenses its intellectual property to partners, who manufacture, distribute, and sell Wana-branded gummies across the U.S., including California , Arizona , Illinois , Michigan , and Florida giving Wana a total footprint of 12 U.S. states currently, and across Canada . Wana expects to have license agreements in place in more than 20 U.S. states, including in future adult-use markets in New York and New Jersey , prior to the end of calendar 2022.

Strategic Benefits

Strengthens Canopy Growth's U.S. Ecosystem : Wana's leadership position and ongoing expansion across the U.S. bolsters Canopy Growth's product, brand, and geographic exposure to the U.S. cannabis market upon federal permissibility.
Dominant Edibles Category : The gummies category is one of the fastest growing segments in both the U.S. and Canadian cannabis markets accounting for more than 71% of all edibles purchased ¹ . Based on Canopy Growth's consumer research, edibles are expected to continue to serve as the primary point of entry for new consumers into the THC category and as such having a leadership position in the gummy category is critical.
Market Leadership in the Edibles Product Category : Wana is the leading cannabis edibles brand in North America based on market share, with the largest multi-market presence of any independent edibles brand across the U.S. gummy market, and #1 share of the Canadian gummy market ² , respectively.
Increases Exposure to U.S. Cannabis Market Upon Federal Permissibility: Upon exercising its right to acquire Wana, Canopy Growth will own and operate Wana's vertically integrated facility in Colorado as well as its rapidly growing licensing division, which currently covers 11 states and is expected to cover more than 20 states by the end of calendar year 2022. This expands upon the coverage provided by the Company's existing right to acquire Acreage Holdings, Inc., a U.S. multi-state operator, and the Company's conditional ownership interest in TerrAscend Corp., another U.S. multi-state operator.
Profitable and Highly Scalable Business Model : Wana has a profitable business with a track record of generating strong revenue growth and category-leading gross and EBITDA margins. Wana's proven licensing model provides an opportunity to scale the brand ahead of U.S. federal permissibility.
Further Strengthens Canopy Growth's Leading House of Brands: Wana is the #1 cannabis edibles brand in North America and will complement Canopy Growth's diversified product portfolio across the recreational cannabis industry.

________________________

¹ Source: Headset data for tracked US states. Edibles includes forms such as beverages, chocolates and other ingestibles.

² Source: Wana data and internal proprietary market share tool that utilizes point of sales data supplied by a third-party data provider, government agencies and Canopy Growth's retail store operations across the country, 13W ended 9/13/21.

"As we establish Canopy Growth as the world's leading cannabis company, acquiring the #1 cannabis edibles brand in North America will serve to strengthen our market position in both Canada and the United States ," said David Klein , CEO, Canopy Growth. "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. We're confident in the future growth of the edibles category and the tremendous opportunities with Wana."

"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 Nancy Whiteman , CEO and Cofounder of Wana Brands . "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. We have met many partners along the way over the past 11 years, but none have felt like the best and right fit until today. We are incredibly humbled and honored to be part of what Canopy Growth is building in terms of the future of this industry."

Transaction Details

The Agreements are structured as three separate option agreements whereby Canopy Growth has a call option to acquire 100% of the membership interests in each Wana Entity. As consideration for entering into the Agreements, Canopy Growth will make an upfront cash payment (the "Upfront Payment") in the aggregate amount of USD $297.5 million .

Upon exercise of the right to acquire each Wana Entity, Canopy Growth will make a payment equal to 15% of the fair market value of such Wana Entity at the time the option is exercised (the "Call Option Payments"). As additional consideration for the right to acquire each Wana Entity, Canopy Growth may make additional deferred payments (the "Deferred Payments") in respect to each Wana Entity as of the 2.5 and 5-year anniversary of the Upfront Payment, less certain deductions. At the option of Canopy Growth, the Call Option Payments and the Deferred Payments may be satisfied in cash, shares or a combination thereof at the Company's sole discretion.

Until such time as Canopy Growth exercises its right to acquire each Wana Entity, Canopy Growth will have no economic or voting interest in Wana, Canopy Growth will not control Wana, and the Company and Wana will continue to operate independently.

Counsel

Cassels Brock & Blackwell LLP is acting as Canadian legal counsel to Canopy Growth. Paul Hastings LLP is acting as U.S. legal counsel to Canopy Growth. Bryan Cave Leighton Paisner LLP is acting as legal counsel to Wana ownership.

About Canopy Growth

Canopy Growth (TSX:WEED, NASDAQ:CGC) is a world-leading diversified cannabis and cannabinoid-based consumer product company, driven by a passion to improve lives, end prohibition, and strengthen communities by unleashing the full potential of cannabis. Leveraging consumer insights and innovation, we offer product varieties in high-quality dried flower, oil, softgel capsule, infused beverage, edible, and topical formats, as well as vaporizer devices by Canopy Growth and industry-leader Storz & Bickel. Our global medical brand, Spectrum Therapeutics, sells a range of full-spectrum products using its colour-coded classification system and is a market leader in both Canada and Germany . Through our award-winning Tweed and Tokyo Smoke banners, we reach our adult-use consumers and have built a loyal following by focusing on top quality products and meaningful customer relationships. Canopy Growth has entered into the health and wellness consumer space in key markets including Canada , the United States , and Europe through BioSteel sports nutrition, and This Works skin and sleep solutions; and has introduced additional hemp derived CBD products to the United States through our First & Free and Martha Stewart CBD brands. Canopy Growth has an established partnership with Fortune 500 alcohol leader Constellation Brands. For more information visit www.canopygrowth.com .

About Wana Brands

Included in the 2020 Inc. 5000 list at #2,074 and boasting a three-year growth rate of 203% , Wana Brands is the No. 1 edibles brand in North America . Wana leads the industry in quality, consistency and potency, providing a range of different options that enable customers to select the specific cannabis experience they want. Wana products offer diverse product forms, a wide range of CBD/THC ratios, as well as a variety of different dosages, onset times and duration of effects. Wana products are available in 12 US states and 9 Canadian provinces, among others imminently coming online. For more information or to subscribe to Wana's e-newsletter, visit www.wanabrands.com . Follow Wana on LinkedIn , Twitter , YouTube and Instagram . Subscribe to Wana's Enhance Your Life Podcast .

Notice Regarding Forward-Looking Information

This news release contains "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable Canadian securities legislation. Often, but not always, forward-looking statements and information can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "estimates", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements or information involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company or its subsidiaries to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements or information contained in this news release. Examples of such statements include statements with respect to future license agreements with respect to Wana's IP in additional markets and the timing thereof, the anticipated benefits of the transaction and the timing of the Upfront Payment.

Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information, including the timeline for federal permissibility in the United States , the integration of the businesses and the ability to achieve the anticipated synergies contemplated by the transaction; inherent uncertainty associated with projections; the diversion of management time on transaction-related issues; expectations regarding future investment, growth and expansion of operations; regulatory and licensing risks; changes in general economic, business and political conditions, including changes in the financial and stock markets; risks related to infectious diseases, including the impacts of the Covid-19 pandemic; legal and regulatory risks inherent in the cannabis industry, including the global regulatory landscape and enforcement related to cannabis, political risks and risks relating to regulatory change; risks relating to anti-money laundering laws; compliance with extensive government regulation and the interpretation of various laws regulations and policies; public opinion and perception of the cannabis industry; and such other risks contained in the public filings of the Company filed with Canadian securities regulators and available under the Company's profile on SEDAR at www.sedar.com and with the United States Securities and Exchange Commission through EDGAR at www.sec.gov/edgar , including the Company's annual report on Form 10-K for the year ended March 31, 2021 .

In respect of the forward-looking statements and information, the Company has provided such statements and information in reliance on certain assumptions that they believe are reasonable at this time. Although the Company believes that the assumptions and factors used in preparing the forward-looking information or forward-looking statements in this news release are reasonable, undue reliance should not be placed on such information and no assurance can be given that such events will occur in the disclosed time frames or at all. Should one or more of the foregoing risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although the Company has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended. The forward-looking information and forward-looking statements included in this news release are made as of the date of this news release and the Company does not undertake any obligation to publicly update such forward-looking information or forward-looking information to reflect new information, subsequent events or otherwise unless required by applicable securities laws.

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SOURCE Canopy Growth Corporation

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Cannabis leaf on road marked with "2025," with sunlight in the background.

New Cannabis Consumption Trends, Regulatory Shifts Seen Driving Market in 2025

Understanding trends in the cannabis industry is paramount for investors eyeing a market with steady growth potential, but the landscape is complex as products and regulations continue to evolve.

Consumption habits are changing as edibles, vaping and THC beverages gain traction, especially among younger users, and cannabis companies are adapting their offerings to meet shifting demand.

Meanwhile, regulatory uncertainty, particularly surrounding the future of the US Farm Bill and state-level restrictions on hemp-derived cannabinoids, continues to challenge the market.

Despite these headwinds, production data and long-term growth forecasts suggest the cannabis industry remains on a promising — albeit turbulent — path. Read on for more on key trends to watch in 2025.

Consumption methods evolving post-legalization

Shifts in consumer behavior are reshaping markets across the board, and the cannabis industry is no exception.

While smoking remains the dominant method of cannabis consumption, a recent report from the Centers for Disease Control and Prevention highlights the growing popularity of edibles, vaping and dabbing.

The report notes that vaping and dabbing are particularly pronounced among younger adults.

A separate study published by the American Medical Association and funded in part by the Canadian Institutes of Health Research also points to how product preferences have changed among Canadian users since legalization in 2018.

The study indicates that while the use of flower, cannabis concentrates, oil, tinctures and topicals has decreased during that time, the use of vape cartridges, edibles and beverages has increased.

Edibles and beverages were legalized in Canada in late 2019, and Truss Beverage was one of the first players to introduce cannabis-infused drinks. Truss was a joint venture formed by Molson Coors Canada (TSX:TPX.A,TSX:TPX.B) and HEXO, a cannabis company that has since been acquired by Tilray Brands (TSX:TLRY,NASDAQ:TLRY).

In early 2020, Tilray launched a lineup of confectionery, wellness products and beverages through its subsidiary, High Park; Canopy Growth (TSX:WEED,NASDAQ:CGC) made a similar move. These companies gradually brought their products to the US as more states legalized cannabis for medical and/or recreational use.

Today, established cannabis brands typically offer edibles and beverages alongside their other products. Organigram Global (TSX:OGI,NASDAQ:OGI) is one of the newest US entrants, with its April acquisition of Collective Project providing immediate access to the US hemp-derived THC beverage market.

Growing awareness of health and wellness, potentially amplified by the pandemic-led adoption of health trackers, appears to be making an impact on the alcoholic beverage market.

A 2023 Gallup poll reveals a two decade decline in alcohol consumption, particularly among younger adults, suggesting a shift towards more health-conscious lifestyles within this demographic.

Craft beer production declined by 4 percent year-on-year in 2024, according to data collected by the Brewers Association. This marked the largest drop in the industry's history, excluding the pandemic. For small, independent craft breweries, 2024 marked the third consecutive year of declining production. A drop in the number of operating small breweries last year provides further evidence of this trend, with 501 closures in 2024 versus 434 openings.

Challenges in the alcohol market extend beyond the brewing industry, with the New York Times recently reporting the closure of a handful of nightclubs facing decreased alcohol sales alongside rising insurance and rent costs.

Meanwhile, cannabis lounges have been popping up across the US for the last several years. As of early 2025, several states had legalized or were in the process of implementing regulations for cannabis consumption lounges.

Hemp market growth despite regulatory uncertainty

The burgeoning hemp industry is another segment of the expanding cannabis market.

The legalization of industrial hemp — defined as cannabis with a THC concentration of 0.3 percent or less — through the 2018 Farm Bill led to initial investment and optimistic projections for CBD wellness products and various industrial applications. The sector’s rapid evolution also brought the rise of hemp-derived intoxicating cannabinoids, creating a market that presented both opportunities and complexities for participants.

However, after an initial boom, a lack of infrastructure and clearly defined regulations for CBD, as well as state-level variations and market oversupply, ultimately contributed to a quick retraction.

2024 was a pivotal year for the US hemp industry, as the hemp-related provisions of the 2018 Farm Bill — originally set to expire in September 2023, but extended to December 31, 2024 — created an urgent need to address critical issues like THC limits and the regulation of novel hemp-derived cannabinoids. A major point of contention was the proposed shift from defining hemp based on Delta-9 THC concentration (0.3 percent or less) to “total THC,” which includes THCA.

This change had the potential to significantly impact farmers and processors, as many hemp varieties that are compliant under the Delta-9 THC rule could exceed the 0.3 percent limit when THCA is included.

Various bills and amendments were proposed in 2024 as part of the Farm Bill discussions, each with different approaches to regulating hemp. Separate regulatory frameworks for industrial hemp and hemp grown for cannabinoids were suggested, and many states took their own action, leading to a patchwork of regulations and even outright bans.

Despite challenges, data from the US Department of Agriculture suggests signs of recovery.

The department's annual National Hemp Report from 2024 points to an 18 percent increase in industrial hemp production value between 2022 and 2023, with output growth seen in specific sectors like floral (18 percent), fiber (133 percent) and seed hemp (414 percent). The 2025 report from the Department of Agriculture indicates further expansion, with notable increases observed in both acreage (up 64 percent from 2023) and value (46 percent).

The 2024 Farm Bill ultimately did not pass, and right now the hemp industry is operating under a temporary extension of the 2018 Farm Bill under the American Relief Act of 2025, signed into law on December 21, 2024.

The 2018 Farm Bill is now set to expire on September 30, 2025.

While analysts for Markets and Markets project that the North American hemp industry will grow at a CAGR of 22.4 percent and ultimately reach a valuation of US$30.24 billion by 2029, the future of the industry will be heavily influenced by the outcome of the ongoing Farm Bill discussions.

US cannabis legalization remains stalled

Although there is clear demand for cannabis products, the now-defunct rescheduling process in the US is likely to continue casting a shadow of uncertainty over the industry's long-term trajectory.

Legal and procedural delays, including allegations of improper conduct and bias within the US Drug Enforcement Administration (DEA), led to hearing cancellations, and the new administration of US President Donald Trump has brought leadership changes to key agencies like the DEA and the Department of Justice.

Terry Cole, who Trump nominated to be DEA administrator on February 11, has a history of opposing cannabis legalization in the country. Similarly, Pam Bondi, Trump’s pick to lead the justice department, staunchly opposed a movement to legalize medical cannabis during her tenure as Florida’s attorney general.

While there have been bipartisan efforts in Congress to end federal cannabis prohibition and establish regulations for eventual legalization, the DEA’s actions and statements indicate a potential stall or reversal of progress.

In addition to that, new research is adding complexity to the debate.

A study published in the American Journal of Psychiatry this past March highlights an association between the use of high-potency cannabis strains and increased risks of psychosis, a factor that may not have been fully considered by the Department of Health and Human Services. As stronger cannabis strains become more widely available, a reassessment of their potential health risks may be required.

Investor takeaway

While the cannabis industry holds promise for growth and innovation, investors must remain acutely aware of the regulatory uncertainties and market volatility that will undoubtedly shape its trajectory in the years to come.

Don’t forget to follow us @INN_Cannabis for real-time news updates!

Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.

Cronos Group Inc. to Hold 2024 Fourth Quarter and Full-Year Earnings Conference Call on February 27, 2025

Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) ("Cronos" or the "Company") will hold its 2024 fourth-quarter and full-year earnings conference call on Thursday, February 27, 2025 at 8:30 a.m. ET. Cronos' senior management team will discuss the Company's financial results and will be available for questions from the investment community after prepared remarks.

To attend the conference call or webcast, participants should register online at https://ir.thecronosgroup.com/events-presentations . To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the scheduled start time. The webcast of the call will be archived for replay on the Company's website.

News Provided by GlobeNewswire via QuoteMedia

Keep reading...Show less

Canopy Growth Announces Plan to Acquire Wana Brands, the #1 Cannabis Edibles Brand in North America

In this article

Guide to cannabis in Australia: New South Wales

Guide to cannabis in Australia: Victoria

Guide to cannabis in Australia: Queensland

Guide to cannabis in Australia: South Australia

Guide to cannabis in Australia: Western Australia

Guide to cannabis in Australia: Tasmania

Guide to cannabis in Australia: Northern Territory

Guide to cannabis in Australia: Australian Capital Territory

Consumption methods evolving post-legalization

Hemp market growth despite regulatory uncertainty

US cannabis legalization remains stalled

Investor takeaway

1. Botanix Pharmaceuticals (ASX:BOT)

2. Vitura Health (ASX:VIT)

3. IDT Australia (ASX:IDT)

4. Little Green Pharma (ASX:LGP)

5. Neurotech (ASX:NTI)

6. ECS Botanics (ASX:ECS)

7. Cann Group (ASX:CAN)

8. Althea (ASX:AGH)

9. Ecofibre (ASX:EOF)

10. Argent Biopharma (ASX:RGT)

Road to cannabis rescheduling hits another speed bump

Pennsylvania governor proposes legal cannabis market in state budget

Senate committee re-examines the SAFER Banking Act

Aurora, Canopy Growth report earnings

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