Canadian cannabis company Canopy Growth, one of the largest cannabis companies in Canada and globally, is exiting its cannabis retail operations in Canada. It will sell 28 stores, run under its Tweed and Tokyo Smoke brands, close 5 others and end franchise and licensing agreements.
Financial terms of the store sale were not immediately disclosed.
Canopy’s exit from retail “reinforces the company’s focus” on achieving “profitability as a cannabis and consumer packaged goods (CPG) company focused on premium brands,” according to A press release.
Divestitures announced last Tuesday include:
- 23 Canopy-owned retail stores in Saskatchewan, Manitoba, and Newfoundland and Labrador, to be purchased by Canopy’s retail partner, OEG Retail Cannabis (OEGRC), which already owns and operates Tokyo Smoke franchise stores in Ontario
- 5 Canopy-owned stores in Alberta, which will be acquired by Four20, a Calgary-based cannabis retail company, and rebranded.
In a press release, OEGRC said it will become “the sole owner of the Tokyo Smoke brand and all Tweed retail stores acquired in this transaction will be rebranded.” OEGRC already has 64 Tokyo Smoke stores in Ontario.
Canopy also terminated a master license agreement with convenience store operator Alimentation Couche-Tard for the Tweed retail brand in Ontario.
The Tweed brand will continue to be used by Canopy for cannabis products.
Canopy explains the sale of its stores by a drop in turnover in the retail sector of 28% as of June 30 last year compared to the previous year. The company attributes the decline to “the rapid and continued increase” in the number of retail cannabis stores in Canada as well as “price compression resulting from increased competition.”
In early August, Canopy announced a net loss of C$2.1 billion ($1.6 billion) for the first quarter. The company also laid off many employees at the start of the year in order to reduce its operating costs and following the closure of several production sites.