Canopy Growth plans to acquire Acreage Holdings
By Grow Opportunity Staff
By Grow Opportunity Staff
Smiths Falls, Ont.-based cannabis company Canopy Growth Corporation announced it is planning to acquire New York City-based cannabis company Acreage Holdings, Inc. in a US$3.4 billion deal.
The acquisition is subject to approval of each company’s shareholders, as well as the B.C. Supreme Court. Special meetings between the shareholders are expected to take place in June 2019, according to a release.
Following approval, Acreage subordinate voting shareholders will also receive 0.5818 of a common share of Canopy growth for each share held at the time of closing.
The companies will also execute a licensing agreement granting Acreage access to Canopy Growth’s line-up of brands such as Tweed and Tokyo Smoke, along with other intellectual property. Until then, the two companies will continue to operate independently.
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.
“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 of 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.”
Acreage is a multi-state operator in U.S. cannabis. It owns or has managed service agreements in place for cannabis-related licenses across 20 states (giving it the right to develop), 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.
“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,” said Acreage Holdings chairman, CEO and president Kevin Murphy. “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.”
Murphy has taken on the role of president in light of George Allen’s immediate departure from the company.