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article imageCanopy Growth, Couche-Tard deal may open convenience store market

By Karen Graham     Feb 25, 2019 in Business
London - Canopy Growth Corp.’s multi-year agreement with convenience-store operator Alimentation Couche-Tard Inc. may turn out to be the most significant deal yet after investing $4.0 billion in Constellation Brands.
Laval, Quebec-based Couche-Tard is a leader in the Canadian convenience store industry, with a network of about 16,000 stores in North America, Europe, Asia, Latin America, and the Middle East. In the United States, the company has 7,800 convenience stores in every state except Utah and Nebraska.
As part of the deal, Canopy Growth will open a single store in London, Ontario. It will be a "Tweed" branded store run by one of the Expressions of Interest Application Lottery winners who will have full ownership and control of the store.
"We are proud to be working with a leading global company like Alimentation Couche-Tard to advise and assist in bringing a trusted cannabis brand to the people of London, Ontario. Our brand is synonymous with having informed staff who can help consumers find the right option for them, whether they are a new or an experienced consumer," said Mark Zekulin, President and Co-CEO of Canopy Growth
Couche-tard convenience store in Montreal  Quebec  Canada in 2006.
Couche-tard convenience store in Montreal, Quebec, Canada in 2006.
How does Canopy Growth fit in with Couche-Tard? With its massive global footprint, Canopy Growth can make good use of Couche-Tard's retail experience and excellent reputation in broadening its retail base on a global scale.
"Alimentation Couche-Tard is excited about taking a leadership role in the development of cannabis retailing excellence in this major Canadian market. We believe the Ontario Cannabis Store and private retailers will co-exist under a tightly regulated framework with common goals to protect public health and safety," said Brian Hannasch, the CEO of Alimenation Couche-Tard.
In an interview on Friday, Canopy Chief Executive Officer Bruce Linton was tight-lipped about the Couche-Tard tie-up, declining to comment on whether the London store will be a launchpad for a bigger partnership. “Canada is an excellent place to figure things out, but it’s not the primary place from which a company can be operating and be a globally relevant player."
A  recreational cannabis container from Tweed Inc. (Canopy Growth Corporation) purchased in Alberta ...
A recreational cannabis container from Tweed Inc. (Canopy Growth Corporation) purchased in Alberta 2018
CambridgeBayWeather (CC BY-SA 4.0)
As far back as a month before recreational cannabis was legalized in Canada, Couche-Tard expressed an interest in getting into the pot industry, according to Yahoo Finance. In an interview on BNN Bloomberg TV, Hannasch said, “We’d rather be part of that solution, part of that journey than sit on the sidelines and wait too long."
Couche-Tard is not the only company to jump on the deal train. Last week, Manitoba Harvest, which claims to be the world’s biggest hemp food maker, joined Tilray in a $317 million cash-and-stock deal, in Tilray's first foray into the food industry.
Manitoba Harvest sells its products at more than 13,000 points of sale across the U.S., including Walmart, Costco, CVS, Kroger, Whole Foods and Amazon, leaving the market for CBD-infused products wide open.
More about canopy growth, CoucheTard, convenience story industry, cannabis market, Constellation Brands
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