Canopy Growth Offloading Canadian Retail BusinessOctober 4, 2022
Ontario-based Canopy Growth is exiting the Canadian cannabis retail business, agreeing to offload its 28 stores operating under the Tweed and Tokyo Smoke banners. OEG Retail Cannabis, an existing Canopy Growth licensee partner, has agreed to acquire all of Canopy’s stores outside of Alberta as well as all Tokyo Smoke-related intellectual property. Canopy has also struck a deal with 420 Investments Ltd., which has agreed to acquire five retail locations in Alberta.
“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,” said Canopy chief executive David Klein. While it’s leaving the retail segment, Canopy is retaining the Tweed cannabis brand, which has a portfolio including mainstream flower, pre-roll, and ready-to-enjoy products.
In its fiscal first quarter ended in June, Canopy saw net revenue slip 1.5% to C$110.1 million ($86m) year-on-year, with adjusted EBITDA showing a loss of C$75 million ($58m). The company attributed the losses to “the continuing impacts of price compression resulting from increased competition and lower sales in the value-priced dried flower category.” Those headwinds were partially offset by a product mix that’s tilting more toward premium offerings—Canopy launched 11 new premium flower and pre-roll products in the quarter, and saw strong demand for its Tweed Iced Tea and Fizz lineups as well as recent additions to the Deep Space beverage brand.—Daniel MarstellerSubscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning. You will also receive the Cannabis edition as part of your subscription.