Founded in Canada six years back, Canopy Growth Corp has done well. With cannabis legal at least for medical purposes in 33 US states and for recreational purposes in all of Canada, it’s now worth $16bn. This makes it the largest cannabis company in the world. It operates in over a dozen countries in every continent except Antarctica. Its share price has risen by 67 percent in 2019. It has just splashed out £43 million for the British beauty brand This Works to make products that benefit people’s sleep and skin.
So what is This Works?
This Works was set up by one-time Vogue journo Kathy Philips in 2004 and owned by the US private equity group Tengram Capital Partners since 2015. Post-takeover, CEO Dr Anna Persaud will remain in her role. This beauty brand rapidly established a customer base by means of social media and online sales, challenging other players that are well established. Celebrity TV chef Martha Stewart, now out of chokey, advertises its medicinal products. Rapper Snoop Dogg pulls the same stunt for its recreational ones. Hollywood slebs, like Jennifer Anniston, have spoken in favour of CBD independently. Rich Gerstene, a partner at Tengram, saluted This Works because it “has never been just a skincare brand – it’s about wellness.” It has sales of between £10 and £15 million a year across 35 countries. Customers tend to be devout. It’s a world leader.
This Works’ won an award for its pillow sprays, which have sold 4.2 million units worldwide. The other This Works product to always get a mention is dry leg oil. Wrinkle-reducing moisturisers, body oils, aromatherapy candles and eye-care products are also produced by this beauty brand.
Canopy Growth is looking to make products that include cannabidiol (CBD), the most common ingredient of cannabis after tetrahydrocannabinol (THC). Unlike THC, CBD doesn’t get you stoned, but it does have numerous health benefits. Dr Persaud enthused about Canopy: “Canopy Growth will provide the expertise, research, scientific rigour and quality assurance that will allow This Works to drive the agenda in wellness beauty’s ever-evolving market.” Canopy’s dosh is its most attractive facet, which will be key to luring international customers.
Canopy returns the praise
Bruce Linton, Canopy’s chairman and co-CEO, returned Dr Persaud’s praise, declaring that his company had long believed CBD might “disrupt the cosmetic and sleep solution industries” and had spent years seeking an appropriate entry point to the natural wellness market. It has now found a beauty brand to do exactly that: “As soon as we met with Dr. Persaud and her team, we knew they were the right partner to embark with on this journey.”
Canopy is acquisition happy
Canopy’s acquisition of This Works is just the latest after Constellation Brands invested $4bn in it in 2018. At the start of 2019, it united with a research company in Oxford to form Spectrum Biomedical, which produces cannabis products for medical patients now that this is legal in the United Kingdom. Elsewhere in Europe, it bought the German pharmaceutical company C3 Cannabinoid Compound Company and Cafina, one of three Spanish companies permitted to produce cannabis for research and medical purposes.