Canopy Growth Buys Cannabis Gummy Maker Wana Brands For $297.5 Million

Canopy Growth (TSX:WEED) is buying weed gummy maker Wana Brands for $297.5 million as the cannabis producer looks to expand into the U.S. market.

Canadian cannabis companies are looking at cross-border expansion as U.S. states legalize the recreational drug and on expectations for federal reforms in Washington, D.C.

Demand for cannabis edibles such as gummies has risen during the pandemic, as people stuck at home turn to cannabis-related products for relaxation and entertainment.

Wana sells gummies in the U.S. state of Colorado and licenses its intellectual property to partners who manufacture, distribute and sell Wana-branded gummies in states including California, Arizona, Illinois, Michigan and Florida.

The acquisition provides Canopy Growth with access to Wana's vertically integrated facility in Colorado and its licensing division, the company said, adding that it would continue operating independently in the state until the deal closes.

The transaction is structured as three separate option agreements allowing Canopy Growth a call option to acquire 100% of the membership interests in each Wana entity, the company said in a news release.