She Built A $350 Million Cannabis Edibles Empire
On a recent Saturday morning, Nancy Whiteman found herself stoned in a Boulder, Colorado, supermarket.
Whiteman, 64, who cofounded the Boulder-based cannabis edibles company Wana Brands in 2010, was testing a new gummy her company had developed, and her product team asked her to identify what effects it had on her, specifically on her physical or mental energy. She took the edible shortly before a Pilates class and two hours later found herself captivated by the labels and products in her local King Soopers.
“I’m always the guinea pig,” says Whiteman, who tests every product Wana creates, including gummies engineered to make users feel calm, fall asleep or stay focused. “I wasn’t especially hungry,” she says of her grocery experience. “It wasn’t a munchies-driven thing; it was more cognitive. I said to myself: ‘Oh, my God, look at the packaging. Who knew that there is tuna fish in glass jars packed in extra virgin olive oil?’ But all of a sudden, this became very intriguing to me with this particular formulation.”
In a little more than a decade, Whiteman, who was dubbed the “queen of legal weed” in 2017, has built one of the most successful brands in the cannabis industry. She is not a household name, but she has quietly and methodically made Wana one of the largest cannabis-infused edibles companies in the world, with estimated 2022 revenue of $115 million. And after Whiteman, who owned 100% of the company, inked a deal in October 2021 to sell Wana at a $350 million valuation to cannabis business Canopy Growth Corporation, she has become one of the richest entrepreneurs in the $26 billion legal weed industry.
Canopy is based in Canada, where cannabis is legal nationwide, but publicly traded in the U.S., which means the deal cannot close until marijuana is no longer banned at the federal level. Canopy has decided to set up a U.S. entity to close the deal with Wana sooner, and a few others like it, but Whiteman has already received most of the money. The deal she struck is unique: She convinced Canopy to buy the option to buy Wana, and Canopy paid her $297.5 million in cash for 85% of the company and will give her the remaining 15% when the transaction closes.
After taxes, a sizable cash disbursement to her employees and a $50 million donation to her nonprofit, Forbes estimates that Whiteman is worth $225 million, enough to debut on this year’s ranking of America’s Most Successful Businesswomen.
“She won,” says cannabis investor Emily Paxhia, who cofounded the pioneering San Francisco–based hedge fund Poseidon in 2013 and has not backed Wana. “She cleared one of the biggest exits, dollar for dollar, as an individual owner. She hit the timing well, and everyone in the gummy category owes a debt of gratitude to Nancy. It’s easy to follow, but she started it.”
Wana is not the flashiest brand or a media darling like competitors Wyld or Kiva, but it is the steady workhorse of the category. “We don’t particularly care about being cool,” says Whiteman over a breakfast of scrambled eggs and potatoes at Manhattan’s Lambs Club. “We care about being effective. And being innovative.”
According to Seattle-based data company Headset, edibles make up about 13% of the legal cannabis market, or about $3.4 billion in sales last year. In its home state of Colorado, Wana is the second-best-selling edibles brand, just behind Wyld, with an estimated 26% of the market and $61 million in retail sales in 2022, according to Headset data. (Wana sells wholesale, so it captured an estimated $30 million in revenue in Colorado.) Overall, Wana and its licensees produce nearly 100 million gummies a year. While Kiva and Wyld are bigger brands in terms of sales, Wana is the most widespread, available in 15 U.S. states, Puerto Rico and nine Canadian provinces.
“I think the Wana strategy is wide versus deep in the sense that they have more exposure than most brands on a state-by-state basis,” says Cy Scott, the CEO and cofounder of Headset.
Whiteman wasn’t destined to be a power player in pot. Born in Chicago and raised in White Plains, New York, she got her MBA at the University of Massachusetts and by the early 1990s was living in Boston, working as vice president of marketing at the venerable life insurance company Paul Revere. Whiteman, her husband and child moved to Boulder in 1996 and she started her own consultancy, helping clients such as Microsoft’s MSN with marketing. One day in 2010, her daughter had a friend over and Whiteman started talking to the friend’s father about work. When she asked him what he did, he said, “ ‘Oh, you wouldn’t approve,’ Whiteman recounts. “Which got my undivided attention.” He explained that he was making an “infused soda pop,” and while Whiteman was “extremely familiar” with pot—she started smoking weed as a teenager—she wasn’t hip to the language of legal cannabis.
“I didn’t even know what he was talking about, but he explained it was infused with marijuana, which is what we called it before we started calling it ‘cannabis,’ ” she says. “And we started talking.”
Whiteman and her husband started making edibles in a commercial kitchen they shared with their daughter’s friend’s father in Boulder. During the early days of legal cannabis in Colorado, the edibles market featured mostly homemade-looking food like what you’d find at a school bake sale. “We just tried a whole bunch of stuff—we had baked goods, we had candy and for one brief period of time we made infused beef jerky,” Whiteman says, laughing.
Without data firms or CRM software to help cannabis companies make product decisions, Whiteman visited each dispensary that sold her products to find out which were most popular with customers. “We stopped doing the things they didn’t buy,” she says, “and kept doing the things they bought.”
By the end of 2011, the Whitemans had moved into their own kitchen—and gotten divorced. (Seven years later, she bought out her ex-husband to become Wana’s sole owner.) They had developed a version of the product that Wana would become known for—the THC-infused gummy. At that point, in Denver, a competitor had begun buying gummy bears and spraying them with hash oil. Whiteman thought they could do better and made Wana’s first vegan-friendly pectin gummy from scratch.
“We got into that product segment very early, before the data told us that that the gummy was going to be the killer app, if you will, of edibles,” she says. “Now, of course, gummies are something like 75% of the category and have really become the platform for edibles.”
In 2015, Wana expanded to Oregon. As marijuana was, and remains, prohibited at the federal level, cannabis cannot legally cross state lines. Whiteman had a choice: build a kitchen in every state she wanted to expand into or license her recipes, formulations and branding to partners in other states. She went with licensing.
“We chose not to go out and raise a lot of money and instead be asset-light, which is a very capital efficient way to do things,” says Whiteman, who still looks as though she would fit well in any corporate board meeting but can tell you the difference between THC extraction methods such as live rosin and distillate. “I looked at other models, and I felt that licensing had the potential to be as profitable or more profitable than setting up facilities in every state. Back then we all thought federal legalization might come a little bit quicker, so there was the specter of having to set up facilities in every state with a good possibility that you were then going to have to shut them down at some point.”
The company now has 16 partners across the U.S. and Canada. Depending on the need to hire local sales-and-marketing staff, Wana takes a cut of between 15% and 40% of revenue.
The strategy hasn’t always gone well. Despite being one of the three largest edibles makers in the U.S., Wana no longer has a presence in California, the country’s largest cannabis market, home to $5.3billion in sales last year. Kiva generated $183 million in retail sales there in 2022, while Wyld brought in $127 million, according to Headset. (Both companies sell wholesale.) But despite the money at stake, Wana left California after two and a half years.
“We happened to enter the market just as wholesale pri-cing started to really plummet,” she says. “Our partner didn’t want to race to the bottom, understandably. We ended up in an unenviable position of being a very expensive product in a market that was experiencing severe price compression. I didn’t see my way to profitability.” After having launched in Cali-fornia in 2019, Wana left the highly competitive market by the second half of 2022. The company is also pulling out of Oregon for similar reasons.
In 2020, when it looked as if federal legalization was within reach under the incoming Biden administration, Whiteman started taking meetings with a few large cannabis companies that had cultivation, manufacturing and retail facilities in multiple states, and with private equity firms and investors outside the industry to explore how much Wana might be worth.
“My feeling was that the industry was starting to change,” she recalls, “and I felt that being aligned with a larger organization was going to make more sense for an independent brand.”
Whiteman began speaking with Canopy, which is listed on the Nasdaq and of which New York–based alcohol giant Constellation, maker of Corona beer and Svedka vodka, owns a 47% stake.
“Like all of us, I was more optimistic about federal legalization happening quicker,” she says of that period. “And I certainly liked the Constellation connection and the access they had to liquor stores. The time seemed right to me.”
With federal legalization up in the air and Canopy’s stock price down 86% since last April, Canopy is setting up a U.S. entity to complete the acquisition.
“Nancy had brilliant timing,” Poseidon’s Paxhia says, explaining that she sold Wana at the top of the market, before the industry fell from its pandemic-induced highs.
With the deal to sell in place, Whiteman has become one of the most successful entrepreneurs in the cannabis industry.
As she finishes her breakfast at the Lambs Club ahead of a speech at a cannabis conference across the street, she ponders a question. As New York’s licensed cannabis economy struggles against its rampant unlicensed gray market, will Wana come to the Empire State?
“The attractiveness of the New York market for legal brands, between taxes and lack of enforcement around illegal dispensaries and the slow rollout of legal dispensaries, currently isn’t there,” she says. “It’s hard for me to see how anyone makes money right now.”
So instead of losing sleep over the city that never sleeps, Whiteman is focusing on strong, growing markets that don’t get much attention. “Sales are booming in Missouri,” she says. “I can tell you that.”