Bruce Linton, Canopy’s chairman and co-chief executive, says the deal secures the company’s entrance strategy into the United States as soon as a federally-permissible pathway exists.
Acreage has cannabis-related licences in 20 states. It runs 87 retail stores and 22 cultivation and processing sites. Former prime minister Brian Mulroney sits on its board of directors.
The companies said they will also execute a licensing agreement granting Acreage access to Canopy Growth’s brands including Tweed and Tokyo Smoke, along with other intellectual property.
Under the deal, Acreage shareholders will receive an immediate payment of approximately US$2.55 per subordinate voting share or US$300 million.
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Once cannabis becomes federally legal in the U.S. and Canopy exercises its right, it will pay an additional 0.5818 of a Canopy share for each Acreage subordinate voting share.
The deal is conditional on shareholder approval in both companies. Shareholders will vote on the deal in June.
Most U.S. states have legalized marijuana in some form, but it remains illegal at the federal level. That complicates many issues for the growing industry, such as access to banking and the ability to operate across state lines.