Canopy Growth Corporation (TSX:WEED) exercised its option to acquire Wana Brands from Nancy Whiteman for $300 million on May 6, 2024. The agreements are structured as three separate option agreements whereby Canopy Growth has a call option to acquire 100% of the membership interests in each Wana Entity. As consideration for entering into the agreements, Canopy Growth will make an upfront cash payment in the aggregate amount of $297.5 million.

Upon exercise of the right to acquire each Wana Entity, Canopy Growth will make a payment equal to 15% of the fair market value of such Wana Entity at the time the option is exercised. As additional consideration for the right to acquire each Wana Entity, Canopy Growth may make additional deferred payments in respect to each Wana Entity as of the 2.5 and 5-year anniversary of the Upfront Payment, less certain deductions. In Related transaction Canopy Growth Corporation also exercised its option to acquire 75% interest in Jetty Extracts on May 7, 2024.

Following the initial closing, Canopy USA will own 100% of the outstanding equity interests in Wana. Wana Brands founder Nancy Whiteman is not leaving the Wana Brands completely, Nancy Whiteman will remain as a member of the Board of Managers leading Canopy USA. Whiteman will also play an active role with the Wana Brands Foundation (WBF), which Whiteman created in 2022 and is one of the largest cannabis-related philanthropy funds to date.

Transaction is subject to certain customary closing conditions, including receipt of regulatory approvals.