MJBizMag January 2022 - 12

FIVE QUESTIONS with Nancy Whiteman
Art of the $300 Million Deal
Wana Brands CEO Nancy Whiteman shares the evolution
of her all-cash deal with Canada's Canopy Growth
By Bart Schaneman
T
he industry was abuzz in
October that Canadian
cannabis producer Canopy
Growth Corp. agreed to pay
$297.5 million in cash for the option
to purchase Boulder, Coloradobased
marijuana edibles company
Wana Brands.
The actual acquisition is conditional
on the United States legalizing
marijuana at the federal level.
The transaction raised some
questions, however, including
whether Wana had to wait to be
paid the $297.5 million (it did not)
and what exactly was meant by
federal legalization.
MJBizDaily spoke with Nancy
Whiteman, co-founder and CEO
of Wana, about her exit strategy,
what she learned about structuring
deals and why she chose to partner
with Canopy.
There's a business cliché that
every entrepreneur needs to
have an exit strategy. Was this
a goal you always had?
Some sort of an exit was always
in the plan, and the particulars of
what the exit looked like was more
of an evolving situation.
We were approached by many
people who felt that going public
was a good idea, that being part of a
special purpose acquisition company
(SPAC) was a good idea, that looking
at private equity was a good idea.
We systematically worked through
the different options.
This, for me, was a good fit to
become part of something that was
12 January 2022 | MJBizMagazine
CEO Nancy Whiteman co-founded Wana Brands in Boulder, Colorado. Courtesy Photo
already established, that had deep
resources and shared our values,
and that could be a partner that
would help us grow. (It was) the
kind of deal that I was looking for.
Do you have any advice
for other American brands
considering structuring a deal
in a similar way?
One of the things that made this
deal maybe a little unusual, from a
valuation perspective, is that Wana
is a highly profitable company.
Canopy wasn't making a big bet
on top-line revenue that was not
backed up by earnings. And that's
why we got the valuation that we
got. That's why we didn't take a lot
of stock.
The bottom line counts. If what
you are looking for is a profitable
exit, I think that companies need
to really be balancing focus on topline
revenue with a lot of focus on
bottom-line revenue.
We have years of audited financials.
We were ready to go when we
felt that the time was right.
What made you want to pull
the trigger on this deal?
If you're an independent brand
like Wana, you have to look at how
the market is going to shift (with
federal legalization).
One of my working assumptions is
that distribution is going to become
a lot more important. Dispensaries
will not be the only game in town.
There will be other ways to purchase
THC products in the future.
So, you start thinking about
what kind of partner can bring

MJBizMag January 2022

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