Canopy Growth set to acquire Acreage Holdings in $3.4bn buyout

Canopy Growth Corporation has entered into a definitive arrangement agreement to acquire 100 percent of the shares of Acreage Holdings, Inc. – with a requirement to do so when cannabis production and sale becomes federally legal in the United States.

The deal, subject to approval of the shareholders of each of Acreage and Canopy Growth as well as the Supreme Court of British Columbia, is valued at approximately US$3.4 billion on a fully-diluted basis.

Under the terms of the arrangement agreement, Acreage Holders will receive an immediate aggregate total payment of US$300 million or approximately US$2.55 per Acreage Subordinate Voting Share, based on the currently outstanding Subordinate Voting Shares of Acreage and conversion of certain convertible ‎securities.

In addition, upon the exercise of the Right, holders of subordinate voting shares of Acreage will receive 0.5818 of a common share of Canopy Growth for each Acreage Subordinate Voting Share held at the time of closing of the transaction.

The companies will also execute a licensing agreement granting Acreage access to Canopy Growth’s award-winning line-up of brands such as Tweed and Tokyo Smoke, along with other intellectual property.

Until the right is exercised, the two companies will continue to operate independently.

“By combining Acreage’s management team, licenses and assets with Canopy Growth’s intellectual property and brands, there will be tremendous value creation for both companies’ shareholders.”

Bruce Linton, Canopy Growth

“Today we announce a complex transaction with a simple objective. Our right to acquire Acreage secures our entrance strategy into the United States as soon as a federally-permissible pathway exists,” said Bruce Linton, Chairman and co-CEO, Canopy Growth.

“By combining Acreage’s management team, licenses and assets with Canopy Growth’s intellectual property and brands, there will be tremendous value creation for both companies’ shareholders.”

“From the first day we created our company, providing exceptional customer care and delivering shareholder value have been our top priorities. This transaction will help accomplish both,” said Acreage Holdings Chairman, CEO and President Kevin Murphy.

“When the right is exercised having access to Canopy Growth’s deep resources will enable us to innovate, develop and distribute quality cannabis brands across the U.S. and continue expanding our U.S. footprint. At the same time, a confluence of factors are making it much more difficult for a multi-state operator to achieve its full potential, including the enormous amount of cash required to scale. Our Board of Directors, management team and I are pleased to deliver significantly increased liquidity to our shareholders and put ourselves in an even stronger position to deliver continued and significant upside.”

Canopy Growth earned national visibility in the United States when it listed its common shares on the New York Stock Exchange, becoming the first cannabis company to do so. Canopy Growth’s U.S. hemp operations are being established in parallel to the Acreage entrance strategy, and will include hemp cultivation, extraction, processing, and packaging products for sale across the United States, where permissible by regulations.

Acreage is a multi-state operator in U.S. cannabis. It owns or has managed services agreements in place for cannabis-related licenses across 20 states, including 87 dispensaries and 22 cultivation and processing sites. Its Board of Directors includes former Canadian Prime Minister Brian Mulroney and former Speaker of the U.S. House of Representatives, John Boehner.Cannabis Business Worldwide

Related Posts