Two of the most recognized cannabis firms in the industry seem to have something up their sleeves. Acreage and Canopy signed a new strategic agreement in the US, which could result in a highly relevant move for all parties involved. The marijuana industry continues to grow and actions like these demonstrate how operators are planning their development plans as time goes on.
According to the announcement, Canopy USA, the holding company of Canopy Growth Corporation (CGC) domiciled in the country, will acquire all of the issued and outstanding float shares through a court-approved plan of arrangement for consideration of 0.4500 of a Canopy common share in exchange for each float share.
Acreage will now be owned by the new entity, in exchange for Canopy Growth shares. The Canadian company had taken a $3.4B option in 2019. It will also acquire Wana and Jetty and bring them together under one umbrella.
Peter Caldini, Chief Executive Officer of Acreage, commented, “The entering into of the Floating Share Agreement with Canopy is a logical next step for Acreage, as we have completed a major transformation of our business over the last few years, delivering profitability, and focusing on expanding our business in highly attractive Northeastern markets in preparation for considerable industry growth. The integration of Acreage into Canopy’s US ecosystem will allow shareholders of both companies to participate in this strategic market opportunity with aligned interests.”
Canopy USA’s board will consist of four directors, with Canopy Growth naming two. The shareholder approvals are required for these deals. Corona-maker Constellation Brands Inc. will become a more passive investor in Canopy Growth.
Acreage will be able to participate at Canopy USA’s onset. Acreage will also have access to Canopy USA’s strategic platform, and can immediately benefit from the revenue and cost synergies that Canopy USA expects to achieve. This will, along with Canopy, will strengthen Canopy USA as a brand powerhouse in advance of any possible US federal permit.