Canopy Growth announces the withdrawal of Canadian retail operations
The resolution supports the company’s strategic goals including streamlining Canadian operations, achieving profitability, and developing a premium portfolio based on consumer brands.
Smith Falls, ONAnd the September 27 2022 /PRNewswire/- Umbrella Growth Foundation (“Canopy Growth” or the “Company”) (TSX: WEED) (NASDAQ: CGC) announced today that the Company has entered into agreements to split its retail business across Canada Which includes stores operating under the Tweed and Tokyo Smok retail banners. This announcement reinforces the company’s focus on moving forward on its path to profitability as a premium company focused on cannabis and consumer packaged goods (CPG).
The Company has entered into an agreement (“OEGRC Transaction”) with OEG Retail Cannabis (“OEGRC”), the current licensed partner of Canopy Growth who currently owns and operates the company’s franchised Tokyo Smoke stores in Ontario. As part of this agreement, OEGRC has agreed to acquire all Canopy Growth stores for businesses outside of Alberta As well as all intellectual property rights related to Tokyo Smoke. The company has also reached an agreement (“FOUR20 Deal”) with 420 Investments Ltd. (“FOUR20”) hereby agrees to FOUR20 to acquire ownership of five retail locations in Alberta. Closing of the OEGRC Transaction and the FOUR20 Transaction is subject to regulatory approvals and other customary closing terms.
We are taking the next critical step in developing Canopy as a leading brand-focused cannabis CPG company while advancing the company’s strategy of investing in product innovation and distribution to drive revenue growth in the Canadian entertainment market.
David KleinCEO of Canopy Growth
By achieving these agreements with organizations that have proven experience in the cannabis trade, we provide continuity to our consumers and team members. With proven best-in-class retail leadership by OEGRC and FOUR20, they will continue to serve Canadian consumers with high-quality in-store experiences that are essential to success in a new industry.
The operational savings realized through these transactions are expected to bring the savings in Canopy overhead and administrative costs close to the maximum expected annual target range as part of the cost reduction measures announced in April 26, 2022.
OEGRC Transaction Overview:
- Upon completion of the OEGRC transaction, OEGRC will acquire ownership of 23 Tokyo Smoke and Tweed store locations throughout ManitobaAnd the SaskatchewanAnd the Newfoundland And the Labrador.
- As part of the OEGRC transaction, the Tokyo Smoke brand will be transferred to OEGRC and any stores purchased that currently bear the Tweed brand will be rebranded.
- The master franchise agreement between the company and OEGRC under which OEGRC licenses the Tokyo Smoke brand in Ontario The deal will be terminated when the OEGRC is closed.
Four20 deal overview:
- FOUR20, a licensed cannabis retailer, will buy five of the company’s subsidiary stores in Alberta. After the FOUR20 deal closes, these stores will be rebranded under the FOUR20 retail banner.
All in-store team members working at the locations obtained will see their continued work with OEGRC and FOUR20 pending the completion of these transactions.
In addition to previous divestitures, the master license agreement between Canopy Growth and Alimentation Couche-Tard Inc. Regarding the use of the Tweed brand for brick-and-mortar retail stores operating in Ontario has also been terminated.
Canopy Growth will continue to own and operate the Tweed brand, including a wide range of mainstream flowers, pre-rolled options, and ready-to-go, as the company looks toward providing Canadians with new ways to engage with one of the industry’s highest-impact brands.
About Canopy Growth Corporation
Canopy Growth (TSX: WEED) (NASDAQ: CGC) is a leading diversified hemp and hemp-based consumer products 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 a diverse range of quality products from dried flowers, oil, softgel capsules, infused beverages, edible and topical forms, as well as vaporizers by Canopy Growth and industry leader Storz & Bickel. Our global medical brand, Spectrum Therapeutics, sells a range of full-spectrum products using a color-coded classification system and is a market leader in both.
Canada And the Germany. Canopy Growth has entered the health and wellness consumer space in key markets including CanadaAnd the United StateAnd the Europe Through BioSteel Sports Nutrition, this works on skin and sleep solutions; Additional CBD products derived from hemp have been introduced to United State With our First & Free and Martha Stewart CBD brands. Canopy Growth has a well-established partnership with the leading Fortune 500 alcoholic beverage company Constellation Brands. For more information, visit www.canopygrowth.com.