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by Stockwatch Business Reporter
The S&P/TSX Cannabis Index added 1.45 to 131.18, while the CSE Composite Index lost 7.79 to 607.50. Canadian cannabis giant Canopy Growth Corp. (WEED) added 42 cents to $16.97 on 3.18 million shares, as it started down another potential pathway into the U.S. market. It has agreed to buy Wana Brands, a popular Colorado-based edibles maker, subject to federal cannabis permissibility in the United States. The deal has a three-part call option structure and requires an upfront cash payment from Canopy of $297.5-million (U.S.).
The deal "strengthens Canopy Growth's U.S. ecosystem," boasted the company. For the moment, the "ecosystem" must remain carefully, conspicuously free of direct involvement from Canopy, which as a Canadian company cannot generate cannabis revenue in markets where cannabis is federally illegal (such as the U.S.). Yet the rules do not prohibit conditional agreements that take effect upon legalization. To that end, Canopy already has a trigger-based option to buy the U.S. MSO (multistate operator) Acreage Holdings Inc. (ACRG.A.U: $2.12), as well as enough conditional options and warrants to amass a one-quarter interest in fellow MSO Terrascend Corp. (TER: $7.39). Now Wana will join the list.
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