Canopy Growth (TSX: WEED) (NYSE: CGC) and Acreage Holdings (CSE: ACRG.U) (OTCQX: ACRGF) released a joint press release today announcing the implementation of the company’s previously announced plan to merge and form one large North American powerhouse. The merger is however contingent on one major event taking place first.
In accordance with their plan of arrangement under the Business Corporations Act of British Columbia, Acreage has amended their articles of incorporation to give Canopy the option to acquire all of the issued and outstanding shares of Acreage Holdings once the United States Federal Government changes their laws and fully legalizes cannabis nationwide.
The lifting of the U.S. Federal cannabis ban is referred to as the “triggering event” in the Canopy and Acreage agreement. Canopy Growth has reserved the right to waive the triggering event.
Until that time, Acreage will continue to operate their business independently from Canopy in order to stay compliant with certain covenants contained in the company’s agreement. Acreage’s Subordinate Voting Shares will continue trading on the CSE, the OTCQX as well as the Frankfurt Stock Exchange.
Acreage shareholders and certain convertible securities holders as of the close of business on June 26, 2019, are entitled to receive an option premium of roughly $2.63 which is their pro rata portion of USD $300,000,000 paid by Canopy Growth for the option to acquire Acreage. The option premium is expected to be paid out to shareholders of record before July 3, 2019.
“On behalf of Canopy Growth, I thank the shareholders of both companies for their vote of confidence in this historic transaction. We have experienced a tremendous year of growth and this deal has activated the accelerator in terms of where we will take both companies in the coming years,” said Canopy Growth Chairman and co-CEO Bruce Linton. “In leading an industry that is full of firsts, this agreement is moving both Acreage and Canopy Growth into unprecedented territory of strength. Giving their team access to all of the key learnings we’ve gleaned over the last few years, will in turn create a truly turnkey entry point into the US market and deepen the value returned to our shareholders once we are federally permitted to close.”
For more information please read the Canopy/Acreage joint press release here.
Investors looking for additional information on Canopy Growth are encouraged to visit the company’s website here.
Investors looking for additional information on Acreage Holdings are encouraged to visit the company’s website here.
About Canopy Growth:
Canopy Growth (TSX: WEED) (NYSE: CGC) is a world-leading diversified cannabis, hemp and cannabis device company, offering distinct brands and curated cannabis varieties in dried, oil and Softgel capsule forms, as well as medical devices through Canopy Growth’s subsidiary, Storz & Bickel GMbH & Co. KG. From product and process innovation to market execution, Canopy Growth is driven by a passion for leadership and a commitment to building a world-class cannabis company one product, site and country at a time. Canopy Growth has operations in over a dozen countries across five continents.
About Acreage Holdings:
Headquartered in New York City, Acreage Holdings (CSE: ACRG.U) (OTCQX: ACRGF) is the largest vertically integrated, multi-state owner of cannabis licenses and assets in the U.S. with respect to the number of states with cannabis related licenses, according to publicly available information. Acreage owns licenses to operate or has management or consulting services agreements in place with license holders to assist in operations in 20 states (including pending acquisitions) with a population of approximately 180 million Americans, and an estimated 2022 total addressable market of more than $17 billion in legal cannabis sales, according to Arcview Market Research. Acreage is dedicated to building and scaling operations to create a seamless, consumer-focused branded cannabis experience. Acreage’s national retail store brand, The Botanist, debuted in 2018
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