PRESS RELEASE

Transaction Strengthens Canopy Growth’s U.S. Ecosystem and Increases U.S. Cannabis Market Exposure Upon Federal Permissibility

Smiths Falls, Ontario, Canada & Boulder, Colorado, USA [Thursday, October 14, 2021] – Canopy Growth Corporation (“Canopy Growth” or “the Company”) (TSX: WEED, NASDAQ: CGC) and Mountain High Products, LLC, Wana Wellness, LLC and The Cima Group, LLC (collectively, “Wana” and every, a “Wana Entity”) are happy to announce that they’ve entered into definitive agreements (the “Agreements”) offering Canopy Growth with the proper, upon federal permissibility of THC in the U.S., to purchase 100% of the excellent membership pursuits of Wana, the #1 hashish edibles model in North America by market share.

Wana manufactures and sells gummies in the U.S. state of Colorado and licenses its mental property to companions, who manufacture, distribute, and promote Wana-branded gummies throughout the U.S., together with California, Arizona, Illinois, Michigan, and Florida giving Wana a complete footprint of 12 U.S. states at present, and throughout Canada. Wana expects to have license agreements in place in greater than 20 U.S. states, together with in future grownup-use markets in New York and New Jersey, prior to the finish of calendar 2022.

Strategic Benefits

  • Strengthens Canopy Growth’s U.S. Ecosystem: Wana’s management place and ongoing growth throughout the U.S. bolsters Canopy Growth’s product, model, and geographic publicity to the U.S. hashish market upon federal permissibility.
  • Dominant Edibles Category: The gummies class is considered one of the quickest rising segments in each the U.S. and Canadian hashish markets accounting for greater than 71% of all edibles bought[1]. Based on Canopy Growth’s client analysis, edibles are anticipated to proceed to function the major level of entry for brand spanking new customers into the THC class and as such having a management place in the gummy class is vital.
  • Market Leadership in the Edibles Product Category: Wana is the main hashish edibles model in North America based mostly on market share, with the largest multi-market presence of any unbiased edibles model throughout the U.S. gummy market, and #1 share of the Canadian gummy market[2], respectively.
  • Increases Exposure to U.S. Cannabis Market Upon Federal Permissibility: Upon exercising its proper to purchase Wana, Canopy Growth will personal and function Wana’s vertically built-in facility in Colorado in addition to its quickly rising licensing division, which at present covers 11 states and is anticipated to cowl greater than 20 states by the finish of calendar 12 months 2022. This expands upon the protection supplied by the Company’s current proper to purchase Acreage Holdings, Inc., a U.S. multi-state operator, and the Company’s conditional possession curiosity in TerrAscend Corp., one other U.S. multi-state operator.
  • Profitable and Highly Scalable Business Model: Wana has a worthwhile enterprise with a monitor report of producing robust income progress and class-main gross and EBITDA margins. Wana’s confirmed licensing mannequin offers a chance to scale the model forward of U.S. federal permissibility.
  • Further Strengthens Canopy Growth’s Leading House of Brands: Wana is the #1 hashish edibles model in North America and can complement Canopy Growth’s diversified product portfolio throughout the leisure hashish business.

“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,” stated David Klein, CEO, Canopy Growth. “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. We’re confident in the future growth of the edibles category and the tremendous opportunities with Wana.”

“Today’s announcement reflects the culmination of more than a decade of hard work, dedication and vision put forth by our employees and partners, as well as an unwavering commitment to the plant and -our customers,” stated Nancy Whiteman, CEO and Cofounder of Wana Brands. “We have long considered what the next phase of our growth might look like, and this deal is not only a great testament to our focus on bottom line growth and fiscal diligence, but also to the value we believe Wana can bring to Canopy and its shareholders now and in the future. We have met many partners along the way over the past 11 years, but none have felt like the best and right fit until today. We are incredibly humbled and honored to be part of what Canopy Growth is building in terms of the future of this industry.”

Transaction Details

The Agreements are structured as three separate choice agreements whereby Canopy Growth has a name choice to purchase 100% of the membership pursuits in every Wana Entity. As consideration for coming into into the Agreements, Canopy Growth will make an upfront money cost (the “Upfront Payment”) in the combination quantity of USD $297.5 million.

Upon train of the proper to purchase every Wana Entity, Canopy Growth will make a cost equal to 15% of the truthful market worth of such Wana Entity at the time the choice is exercised (the “Call Option Payments”). As further consideration for the proper to purchase every Wana Entity, Canopy Growth might make further deferred funds (the “Deferred Payments”) in respect to every Wana Entity as of the 2.5 and 5-12 months anniversary of the Upfront Payment, much less sure deductions. At the choice of Canopy Growth, the Call Option Payments and the Deferred Payments could also be glad in money, shares or a mix thereof at the Company’s sole discretion.

Until such time as Canopy Growth workouts its proper to purchase every Wana Entity, Canopy Growth can have no financial or voting curiosity in Wana, Canopy Growth is not going to management Wana, and the Company and Wana will proceed to function independently.

Counsel

Cassels Brock & Blackwell LLP is appearing as Canadian authorized counsel to Canopy Growth. Paul Hastings LLP is appearing as U.S. authorized counsel to Canopy Growth. Bryan Cave Leighton Paisner LLP is appearing as authorized counsel to Wana possession.

About Canopy Growth

Canopy Growth (TSX:WEED, NASDAQ:CGC) is a world-main diversified hashish and cannabinoid-based mostly client product firm, pushed by a ardour to enhance lives, finish prohibition, and strengthen communities by unleashing the full potential of hashish. Leveraging client insights and innovation, we provide product varieties in excessive-high quality dried flower, oil, softgel capsule, infused beverage, edible, and topical codecs, in addition to vaporizer gadgets by Canopy Growth and business-chief Storz & Bickel. Our international medical model, Spectrum Therapeutics, sells a spread of full-spectrum merchandise utilizing its color-coded classification system and is a market chief in each Canada and Germany. Through our award-successful Tweed and Tokyo Smoke banners, we attain our grownup-use customers and have constructed a loyal following by specializing in high-quality merchandise and significant buyer relationships. Canopy Growth has entered into the well being and wellness client house in key markets together with Canada, the United States, and Europe via BioSteel sports activities vitamin, and This Works pores and skin and sleep options; and has launched further hemp derived CBD merchandise to the United States via our First & Free and Martha Stewart CBD manufacturers. Canopy Growth has a longtime partnership with Fortune 500 alcohol chief Constellation Brands. For extra data go towww.canopygrowth.com.

About Wana Brands

Included in the 2020 Inc. 5000 list at #2,074 and boasting a three-year growth rate of 203%, Wana Brands is the No. 1 edibles model in North America. Wana leads the business in high quality, consistency and efficiency, offering a spread of various choices that allow clients to choose the particular hashish expertise they need. Wana merchandise supply various product types, a variety of CBD/THC ratios, in addition to a wide range of completely different dosages, onset instances and period of results. Wana merchandise can be found in 12 US states and 9 Canadian provinces, amongst others imminently coming on-line. For extra data or to subscribe to Wana’s e-publication, go to www.wanabrands.com. Follow Wana on LinkedIn,Twitter, YouTube and Instagram Subscribe to Wana’s Enhance Your Life Podcast.

Notice Regarding Forward-Looking Information

This information launch accommodates “forward-looking statements” inside the that means of the United States Private Securities Litigation Reform Act of 1995 and “forward-looking information” inside the that means of relevant Canadian securities laws. Often, however not at all times, ahead-trying statements and knowledge could be recognized by the use of phrases equivalent to “plans”, “expects” or “does not expect”, “is expected”, “estimates”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such phrases and phrases or state that sure actions, occasions or outcomes “may”, “could”, “would”, “might” or “will” be taken, happen or be achieved. Forward-looking statements or data contain recognized and unknown dangers, uncertainties and different elements which can trigger the precise outcomes, efficiency or achievements of the Company or its subsidiaries to be materially completely different from any future outcomes, efficiency or achievements expressed or implied by the ahead-trying statements or data contained in this information launch. Examples of such statements embrace statements with respect to future license agreements with respect to Wana’s IP in further markets and the timing thereof, the anticipated advantages of the transaction and the timing of the Upfront Payment.

Risks, uncertainties and different elements concerned with ahead-trying data might trigger precise occasions, outcomes, efficiency, prospects and alternatives to differ materially from these expressed or implied by such ahead-trying data, together with the timeline for federal permissibility in the United States, the integration of the companies and the means to obtain the anticipated synergies contemplated by the transaction; inherent uncertainty related to projections; the diversion of administration time on transaction-associated points; expectations relating to future funding, progress and growth of operations; regulatory and licensing dangers; modifications in common financial, enterprise and political circumstances, together with modifications in the monetary and inventory markets; dangers associated to infectious ailments, together with the impacts of the Covid-19 pandemic; authorized and regulatory dangers inherent in the hashish business, together with the international regulatory panorama and enforcement associated to hashish, political dangers and dangers relating to regulatory change; dangers relating to anti-cash laundering legal guidelines; compliance with in depth authorities regulation and the interpretation of varied legal guidelines rules and insurance policies; public opinion and notion of the hashish business; and such different dangers contained in the public filings of the Company filed with Canadian securities regulators and out there below the Company’s profile on SEDAR at www.sedar.com and with the United States Securities and Exchange Commission via EDGAR at www.sec.gov/edgar, together with the Company’s annual report on Form 10-Ok for the 12 months ended March 31, 2021.

In respect of the ahead-trying statements and knowledge, the Company has supplied such statements and knowledge in reliance on sure assumptions that they imagine are cheap presently. Although the Company believes that the assumptions and elements used in getting ready the ahead-trying data or ahead-trying statements in this information launch are cheap, undue reliance shouldn’t be positioned on such data and no assurance could be provided that such occasions will happen in the disclosed time frames or in any respect. Should a number of of the foregoing dangers or uncertainties materialize, or ought to assumptions underlying the ahead-trying data show incorrect, precise outcomes might range materially from these described herein as supposed, deliberate, anticipated, believed, estimated or anticipated. Although the Company has tried to establish necessary dangers, uncertainties and elements which might trigger precise outcomes to differ materially, there could also be others that trigger outcomes not to be as anticipated, estimated or supposed. The ahead-trying data and ahead-trying statements included in this information launch are made as of the date of this information launch and the Company doesn’t undertake any obligation to publicly replace such ahead-trying data or ahead-trying data to mirror new data, subsequent occasions or in any other case except required by relevant securities legal guidelines. 

[1] Source: Headset information for tracked US states. Edibles consists of types equivalent to drinks, goodies and different ingestibles.

[2] Source: Wana information and inside proprietary market share device that makes use of level of gross sales information provided by a 3rd-occasion information supplier, authorities businesses and Canopy Growth’s retail retailer operations throughout the nation, 13W ended 9/13/21.

 



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