Canopy Growth withdraws from retail cannabis sales in Canada

The Canadian cannabis company Canopy Growth, one of the largest cannabis companies in Canada and worldwide, is winding down its cannabis retail operations in Canada. It will sell 28 stores operated under its Tweed and Tokyo Smoke brands, close 5 others, and terminate its franchise and licensing agreements.

The financial terms of the sale of the stores were not immediately disclosed.

Canopy's exit from the retail business «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.

The divestitures announced last Tuesday include:

• 23 retail stores owned by Canopy in Saskatchewan, Manitoba, and Newfoundland and Labrador, which will be acquired by Canopy’s retail partner, OEG Retail Cannabis (OEGRC), which already owns and operates Tokyo Smoke franchise stores in Ontario
• Five Canopy-owned stores in Alberta, which will be acquired by Four20, a Calgary-based cannabis retailer, and rebranded.

In a press release, OEGRC stated that it will become «the sole owner of the Tokyo Smoke brand and that all Tweed retail stores acquired as part of this transaction will be renamed.» OEGRC already owns 64 Tokyo Smoke stores in Ontario.

Canopy has also terminated a master licensing agreement with the operator of Alimentation Couche-Tard convenience stores for the Tweed retail brand in Ontario.

Canopy will continue to use the Tweed brand for its cannabis products.

Canopy attributes the sale of its stores to a 28% decline in retail revenue as of June 30 compared to the previous year. The company attributes this decline to the «rapid and ongoing increase» in the number of cannabis retail stores in Canada, as well as to «price pressure resulting from increased competition.».

In early August, Canopy reported a net loss of 2.1 billion Canadian dollars (1.6 billion dollars) for the first quarter. The company also Many people were laid off at the beginning of the year in order to reduce its operating costs and following the closure of several production sites.