Shares of Canadian cannabis company Canopy Growth (CGC) - Get Canopy Growth Corporation Report jumped Thursday after the company announced an agreement to purchase Wana Brands, an edibles manufacturer based in Boulder Colorado, nearly $300 million.
Canopy Growth will receive permission to acquire 100% of the company once the U.S. makes THC legally federally as part of the deal, which includes a $297.5 million up from cash payment.
"As we establish Canopy Growth as the world's leading cannabis company, acquiring the #1 cannabis edibles brand in North America will serve to strengthen our market position in both Canada and the United States," said Canopy CEO David Klein.
Canopy Growth shares ended up 3.1% at $13.70 Thursday.
Wana manufactures and sells gummies in Colorado and licenses its intellectual property to partners who manufacture and sell the gummies in 12 states and Canada.
Wana expects to have license agreements in place in more than 20 U.S. states, including newly online states like New York and New Jersey, before the end of calendar 2022.
"The right to acquire Wana secures another major, direct pathway into the U.S. THC market upon federal permissibility, and in Canada we'll be adding the top-ranked cannabinoid gummies to our industry-leading house of brands," Klein said.
In its most recent quarter, Canopy Growth swung to a profit on higher revenue and a decline in costs.
For the quarter ended June 30 Canopy Growth posted profit of C$0.84 (US$0.67) compared with a loss of C$0.30 in the year-earlier quarter.
The operating loss widened to C$187.7 million from C$172.4 million.