Cannabis producer Canopy Growth has completed the sale of its This Works skin care and wellness unit to United Kingdom-based Inspirit Capital for 9.3 million pounds (15.9 million Canadian dollars).
The sale, announced Monday, is another step in Canopy’s plan to become an “asset-light” cannabis business with a focus on North American marijuana operations.
But the sale price is substantially lower than what Canopy paid for London-based This Works in 2019.
In 2019, Canopy acquired the company for approximately CA$73.8 million in cash.
At the time, Canopy said the acquisition was a key aspect of its hemp and CBD strategy and would be an integral part of its entry into the natural wellness industry.
This Works is involved in the production, distribution and sale of beauty, skin care, wellness and sleep products – some of which include hemp-derived CBD isolate.
As part of the latest deal, Canopy will receive:
- An upfront consideration of 2.7 million pounds ($3.4 million) in cash and other, unspecified consideration.
- A loan note issued by the buyer for an unspecified amount.
Inspirit Capital will receive This Works’ leadership, staff and intellectual property in accordance with the sale agreement, according to Canopy’s announcement.
This year, Canopy has grossed more than CA$155 million from the sale of seven properties in Canada, including its former headquarters in Smiths Falls, Ontario.
“We are resolutely focused on achieving North American cannabis market leadership, and this completed sale represents a further step to enable this through the transformation of Canopy Growth into a simplified, asset-light, cannabis focused business,” CEO David Klein said in a statement.
“In addition to realizing the proceeds from this sale, which will further strengthen our financial position, we’re pleased to have found a buyer that is committed to the continued development of the This Works brand.”
Canopy’s sale of This Works comes roughly four years after its acquisition.
This Works has experienced inconsistent sales since the 2019 acquisition by Canopy.
In the 2020 fiscal year, This Works recorded CA$24.7 million in sales.
That jumped to CA$33.3 million in 2021 and CA$32.3 million in 2022, respectfully.
In the 2023 fiscal year, which ended at the end of March, annual sales fell to CA$26 million, 19.5% lower than the previous year.
This Works was founded in 2004.
Canopy shares trade as CGC on the Nasdaq and WEED on the Toronto Stock Exchange.
