Canadian cannabis company Canopy Growth Corporation on Tuesday announced that it is divesting itself of its retail cannabis businesses across the nation, including its stores operating under the Tweed and Tokyo Smoke banners. The company said the move reinforces its “focus on advancing its path to profitability as a premium brand-focused cannabis and consumer packaged goods company.”
In a statement, CEO David Klein described the plan as “the next critical step in advancing Canopy as a leading premium brand-focused [consumer packaged goods] cannabis company while furthering the company’s strategy of investing in product innovation and distribution to drive revenue growth in the Canadian recreational market.”
Under the agreement, OEG Retail Cannabis (OEGRC), an existing Canopy Growth licensee partner that currently owns and operates the company’s franchised Tokyo Smoke stores in Ontario, will acquire all Tokyo Smoke-related intellectual property. Canopy said it has also reached an agreement with 420 Investments Ltd. in which 420 will acquire the ownership of five retail locations in Alberta.
Both transactions are subject to regulatory approvals and other customary closing conditions.
“By realizing these agreements with organizations that possess proven cannabis retail expertise, we are providing continuity for consumers and team members. Through the best-in-class retail leadership that OEGRC and 420 have demonstrated, they will continue to serve Canadian consumers with the high-quality in-store experiences that are essential for success in a new industry.” — Klein, in a statement
The plan will also terminate Canopy’s master license agreement with Alimentation Couche-Tard Inc. with respect to the use of the Tweed brand for brick-and-mortar retail stores operating in Ontario.
Canopy will, however, continue to own and operate the Tweed brand.
The company indicated that all of its retail workers would continue their employment under the new regime.
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