Canopy Growth Corp. (WEED) is exiting the retail cannabis business with the sale of its Tweed
and Tokyo Smoke stores across Canada.
The Smiths Falls, Ontario-based company announced that it has sold all its stores outside
Alberta, as well as the intellectual property for Tokyo Smoke, to privately held OEG Retail
Cannabis.
OEG Retail Cannabis is operated by the Katz Group, which also owns the Edmonton Oilers
NHL hockey team and previously held a license to operate Canopy Growth’s Tokyo Smoke
stores within Ontario.
The new deal will see OEG Retail Cannabis, which already owns 64 Tokyo Smoke stores, take
control of an additional 23 Tokyo Smoke and Tweed stores in Manitoba, Saskatchewan and
Newfoundland and Labrador.
Another company called 420 Investments is purchasing five Canopy Growth stores in Alberta
and plans to rebrand them under its “Four20” retail name.
Financial details of the deals were not disclosed.
Canopy Growth did say that its divestment of its retail cannabis stores is part of ongoing efforts
to reduce costs, which it has been undertaking through job cuts and the closure of multiple
production facilities.
The retail cannabis market is oversaturated by many metrics, with Ontario home to more than
1,300 stores. Additionally, cannabis companies in both the retail and production space have
struggled to turn a profit because they face competition from the black market.
The average price for cannabis in Canada was $11.78 per gram at the start of 2019, shortly
after legalization, but fell to $7.50 a gram late last year as companies try to compete with the
thriving black market.
Canopy Growth’s stock is down 66% this year and currently trading at $3.93 per share.