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Canadian Cannabis Company Canopy Growth Sells Off Stores

Keegan Williams

By Keegan Williams

September 30, 2022

Cannabis Excise Stamp. Legal product in Cannada.

iStock

It appears that

cannabis company Canopy Growth Corp. is calling it quits, at least when it comes to its brick-and-mortar retail stores. The company earlier this week that it had entered agreements to sell off its 28 corporate-owned stores operating under the Tweed and Tokyo Smoke retail brands, along with closing another five stores and ending franchising and licensing agreements.

In the announcement, Canopy Growth reinforces its focus on building profitability and advancing as a premium, brand-focused cannabis and consumer packaged goods company.

Canopy Growth is known as a world-leading, diversified cannabis and cannabinoid-based consumer product company, offering product varieties in high-quality dried flower, oil, softgel capsules, infused beverages, edibles, vaporizers and topical formats. The company has entered into key health and wellness markets in

, the United States and Europe with its skin and sleep solutions. It has also introduced its own line of hemp-derived CBD products.

The company reached an agreement with existing licensee partner OEG Retail Cannabis (OEGRC), which currently owns and operates franchised Tokyo Smoke stores in Ontario, where OEGRC agreed to acquire all of Canopy Growth’s corporate stores outside of Alberta and all Tokyo Smoke-related intellectual property.

Following completion of this transaction, OEGRC will acquire ownership of 23 Tokyo Smoke and Tweed store locations throughout Manitoba, Saskatechewan, Newfoundland and Labrador. The Tokyo Smoke brand will also be transferred to OEGRC and any purchased stores branded as Tweed will be rebranded. 

Additionally, Canopy Growth also reached an agreement with Four20 to acquire the ownership of five retail locations in Alberta. After the close of this transaction, the stores will be rebranded under Four20’s retail banner.

All locations will retain in-store team members, who will see their employment continue with OEGRC and Four20, pending the completion of the transactions.

The release also notes that the master license agreement between Canopy Growth and Alimentation Couche-Tard Inc., regarding the use of the Tweed brand for brick-and-mortar retail stores operating in Ontario, has been terminated. 

In addition, MJBizDaily

that Canopy’s remaining five stores will be closed, and that Canopy will have no Canadian retail stores remaining.

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Canopy Growth’s Road Forward

Canopy Growth CEO David Klein said that they are taking the “next critical step” to advance as a leading, premium, brand-focused cannabis company. Klein said Canopy is ultimately looking ahead to continue investing in product innovation and distribution, to “drive revenue growth in the Canadian recreational market.”

“By realizing these agreements with organizations that possess proven cannabis retail expertise, we are providing continuity for consumers and team members,” Klein said. “Through the best-in-class retail leadership that OEGRC and FOUR20 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.”

According to a news release, the money Canopy saves through these transactions is expected to result in its projected selling, general and administrative cost savings being closer to the high end of the annual target range expected as part of the cost reduction actions the company announced in April 2022. That same month, Canopy laid off 8 percent of its workforce. In early August, the company also

a first-quarter net loss of 2.1 billion Canadian dollars, or $1.6 billion. 

The changes come as many retail cannabis stores across North America report a dip in sales and traffic. Canopy specifically saw a decline in sales, with business-to-consumer revenue for its quarter ending in June 30 falling by approximately 28 percent from the same quarter a year prior.

As the company looks ahead at new and innovative ways to engage cannabis consumers, Canopy Growth plans to continue ownership and operation of the Tweed brand, which includes a variety of mainstream flower and pre-roll options. 

Keegan Williams

About The Author

Keegan Williams

HIGH THERE MISSION

WE’RE A CREATIVE COMMUNITY — EXPLORING THE SCIENCE, CRAFT, AND CULTURE OF CANNABIS.
WE BELIEVE THAT WE HAVE A COLLECTIVE RESPONSIBILITY TOWARDS ERADICATING THE STIGMA, MISINFORMATION, AND INEQUITIES SURROUNDING THIS PLANT, SO WE CAN UNLOCK ITS TRUE POTENTIAL FOR ALL.

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