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[Duster340]

Canopy Growth looks to grow U.S. business with new holding company structure

SMITHS FALLS, Ont. — Canopy Growth Corp. says it is looking to grow its U.S. business with the creation of a new U.S.-domiciled company that will hold its U.S. cannabis investments.

Canadian Press about 2 hours ago about 2 hours ago

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Staff work in a marijuana grow room at Canopy Growth's Tweed facility in Smiths Falls, Ont. on Thursday, Aug. 23, 2018. Canopy Growth Corp. says it is looking to grow its U.S. business with the creation of a new U.S.-domiciled company that will hold its U.S. cannabis investments.THE CANADIAN PRESS/Sean Kilpatrick

SMITHS FALLS, Ont. — Canopy Growth Corp. says it is looking to grow its U.S. business with the creation of a new U.S.-domiciled company that will hold its U.S. cannabis investments.

The company says the establishment of Canopy USA LLC will enable it to exercise its rights to acquire U.S. cannabis companies Acreage, Wanna and Jetty.

In addition, Canopy USA will control a conditional ownership position in U.S. cannabis company TerrAscend Corp.

Canopy CEO David Klein says the strategy will help the company's investors and brands realize value in the near term while positioning it for profitable growth and a fast start upon U.S. federal permissibility.

In connection with the creation of Canopy USA, Canopy will hold a shareholder vote on the creation of a new class of non-voting exchangeable shares.

 

It says the exchangeable shares will provide shareholders that may otherwise have concerns about the company's exposure to the U.S. cannabis market with an opportunity to retain an interest in Canopy through a non-voting and non-participating share. 

This report by The Canadian Press was first published Oct. 25, 2022.

Companies in this story: (TSX:WEED)

The Canadian Press

[QCINDIVALUVIN]

Mmm...I wonder what will come out of this with Wana and Indiva...contract manufacturing would be great.

[caretired1]

Klein will want the cDN revenue as soon as he gets the us rev.  He keeps talking about an asset light model and growing the wana licensing base so they will likely will go contract mfg so they can control the sales and mktg and get those revenue #s but not have to invest in the ops side.

[QCINDIVALUVIN]

Yea...I also think a buyout would be better for both parties under the right conditions/offer.

[caretired1]

Given that canopy has no expertise to make the wana products in CDa I expect they would want to redo the licensing deal so they can do all sales and mktg in CDa and let Indiva do the rest. That may mean a lump sum of some sort to Indiva or a richer longer term mfg agmt. This is all in the cards for 2023 now. They(canopy) plan to close the wana deal in the first half of 23 is what I heard

[QCINDIVALUVIN]

Under the current agreement, the lump sum would be close to 35 millions. At this price, they should chip in a little bit more and buy Indiva out. With around 50m of revenues for 2022 and probably over 60m for 2023, a 200m+ buyout would make sense.

[canasol46]

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