Canopy Growth Corporation WEED CGC is divesting its retail business across Canada, including the stores operating under the Tweed and Tokyo Smoke retail banners.
Under the agreement with the Canadian cannabis giant, OEG Retail Cannabis, an existing Canopy Growth licensee partner that currently owns and operates Tokyo Smoke stores in Ontario, opted to acquire Canopy's 23 Tokyo Smoke and Tweed store locations across Manitoba, Saskatchewan, and Newfoundland and Labrador.
Moreover, Canopy reached an agreement with 420 Investments Ltd., pursuant to which FOUR20 agreed to acquire the ownership of five retail locations in Alberta.
In addition, the Smiths Falls, Ontario-based company also terminated a licensing agreement in Ontario for Alimentation Couche-Tard Inc. ATD ANCTF to operate Tweed-branded dispensaries.
Why It Matters?
The move is part of Canopy's focus on advancing its path to profitability as a premium brand-focused cannabis and consumer packaged goods company.
"We are taking the next critical step in advancing Canopy as a leading premium brand-focused CPG cannabis company while furthering the Company's strategy of investing in product innovation and distribution to drive revenue growth in the Canadian recreational market," David Klein, the company's CEO, said. "By realizing these agreements with organizations that possess proven cannabis retail expertise, we are providing continuity for consumers and team members."
The closing of both deals is subject to regulatory approvals and other customary closing conditions, after which the Tokyo Smoke brand will be transferred to OEGRC, and any purchased stores currently branded as Tweed will be rebranded.
Canopy Growth will continue to own and operate the Tweed brand, including a portfolio of mainstream flower, pre-rolled, and ready-to-enjoy options.
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CGC Price Action
Canopy Growth's shares traded 2.10% lower at $2.8 per share during the pre-market session on Wednesday morning.
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