Canopy USA exercises options to buy Wana Brands and Jetty Extracts as it moves into the U.S.

By Steve Gelsi

Canopy Growth made $297.5 million up-front payment to Wana Brands in 2021

Canopy Growth Corp. said Tuesday its Canopy USA unit would exercise its options to buy two U.S. marijuana companies as part of its effort to "realize compelling financial benefits, including the ability to drive revenue growth, and realize cost synergies."

The deal comes nearly three years after Canopy Growth (CGC) made an up-front payment of $297.5 million to Wana Brands.

The company did not disclose any financial details about its option to buy Jetty Extracts. Canopy Growth said no additional payments will be made.

Once the deal closes, Canopy USA will own 100% of outstanding equity interests in Wana and about 75% of Jetty.

The company did not provide a date for when the deal will close. A source familiar with the transaction said Canopy Growth expects to close both deals over the summer.

Canopy Growth's stock dropped 1.2%.

Canopy USA also still plans to buy U.S. multi-state cannabis operator Acreage. That deal is currently expected to close in the first half of 2025, the source said.

Canopy Growth's stock has gained 87% so far this year, but it's still down 23% over the year-ago period. The Amplify Alternative Harvest ETF (MJ) is up 26.6% in 2024.

Also read: Nasdaq finally 'warming up' to Canadian cannabis companies with U.S. exposure. Could American growers be next?

-Steve Gelsi

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05-07-24 1516ET

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