Canopy Growth & Rapper Drake Terminate Cannabis Collaboration, Cannabis Giant Still Has Martha Stewart

When Canadian rapper Drake announced he was partnering with cannabis giant Canopy Growth Corporation WEED CGC, the celebrity value seemed to be positive for both parties. Now, over a year since teaming up, Canopy and Drake have parted ways, reported The Canadian Press.

At the time, November 2019, they agreed to join forces and launch a new cannabis company More Life Growth Company, which would produce cannabis focused on wellness and personal growth. The company was based in Drake’s hometown, Toronto.

Their partnership was structured around an agreement where Drake would hold a 60% stake in More Life and Canopy would control the remaining 40%.

Based on Canopy’s recent annual report with the Securities and Exchange Commission, both parties agreed to terminate the sublicense agreement between them as of March 1st, 2021. As a result, Canopy “derecognized” close to $33.7 million in remaining minimum royalty obligations owing to More Life In March.

In its filing, the company also noted recognizing impairment charges relating to More Life of $10.3 million and $14.9 million for fiscal 2021 and 2020, respectively.

Canopy did not share why it pursued the divestiture and Drake’s publicists and the agency representing him did not respond to requests for comment, according to The Canadian Press.

Martha Stewart Partnership Still Going Strong

Drake wasn’t the only celebrity Canopy took under its helm. Back in 2019, the Smiths Falls, Ontario-based company welcomed Martha Stewart as part of the deal with Sequential Brands Group, Inc. SQBG. Since then, Stewart has been advising the company on developing its own line of CBD products.

More recently, Canopy reinforced this collaboration naming Stewart as its official strategic advisor.

On the heels of Canopy ending its partnership with Drake, the company reported its earnings results with fiscal 2021 billion-dollar losses. The company, however, claimed its still on track to achieve positive adjusted EBITDA. 

In addition, Cantor Fitzgerald’s Pablo Zuanic said that Canopy's financial results show stable business-to-business and impressive CBD sales though they lowered their price target on the stock. 

Canopy’s shares were trading 1.78% lower at $24.82 per share at the time of writing.