Canopy Growth Divests UK-Based Skincare And Wellness Brand As Core Restructuring Continues
Canopy Growth Corporation (TSX: WEED) (NASDAQ: CGC) has finalized the divestiture of its skincare and wellness brand, This Works, to Inspirit Capital, an investment firm based in London. This Works, headquartered in London, England, is renowned for offering a diverse range of premium natural skincare and sleep solution products to a global consumer base.
As part of the completed sale agreement, This Works’ leadership, workforce, and intellectual property are now under the ownership of Inspirit Capital. The transaction, valued at up to £9.3 million ($15.9 million CAD), encompasses cash components. Canopy Growth will receive an upfront payment of £2.7 million ($4.6 million CAD) in cash, along with additional considerations, such as a loan note issued by the buyer and a contingent earn-out.
According to the official press release statement, refocusing on North America appears to have played a part in Canopy Growth’s decision to transact. Company CEO, David Klein, emphasized the company’s commitment to attaining leadership in the North American cannabis market, stating that the sale is a significant move towards transforming Canopy Growth into a streamlined, asset-light business with a primary focus on cannabis.
David Klein further highlighted the importance of the sale in fortifying the company’s financial standing, while expressing satisfaction in finding a buyer dedicated to the ongoing advancement of the This Works brand.
The transaction comes just a few days following Canopy Growth’s divestiture of Biosteel assets which transferred the assets of BioSteel Canada and BioSteel Manufacturing, LLC for aggregate gross proceeds of $30.4 million. The maneuver wiped away a significant cash drain from the parent company, which, according to court documents, required “approximately $15-million a month from Canopy” to keep operations running.