The once-high-flying Canopy Growth Corp. (TSX: WEED) (Nasdaq: CGC) announced Tuesday that it’s selling off all of its retail cannabis stores across Canada in order to focus on “its path to profitability.”
That path means being more of a core consumer packaged goods business instead of a vertically integrated cannabis company, according to a news release from the company.
“We are taking the next critical step in advancing Canopy as a leading premium brand-focused CPG cannabis company while furthering the company’s strategy of investing in product innovation and distribution to drive revenue growth in the Canadian recreational market,” Canopy CEO David Klein said in the announcement.
Canopy will sell its 23 Tokyo Smoke and Tweed stores in Labrador, Manitoba, Newfoundland and Saskatchewan to OEG Retail Cannabis. Five stores in Alberta will be sold to 420 Investments Ltd.
Both companies are existing licensees of Canopy’s, and the Tweed stores will be rebranded. Canopy will retain the Tweed brand and continue running it as a branded product line of marijuana flower, pre-rolls and other items.
Canopy also terminated a licensing agreement in Ontario for Alimentation Couche-Tard to operate Tweed-branded dispensaries.
In the second quarter this year, Canopy posted a more than C$2 billion loss, which it attributed to growing competition, price compression and an overall sales slump.