(Reuters) – Canada’s Canopy Growth Corp said on Thursday it would buy weed gummies maker Wana Brands for $297.5 million, as the world’s biggest pot producer looks to expand in the U.S. cannabis market.
Canadian pot producers are looking at cross-border expansion, as the industry has garnered investor interest with some U.S. states legalizing pot and on increased expectations for federal marijuana reform.
Demand for pot 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 will provide Canopy 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 its statement.
(Reporting by Rithika Krishna in Bengaluru; Editing by Vinay Dwivedi)
