On Thursday morning, Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) announced their plan to acquire Acreage Holdings, Inc. (OTCQX: ACRGF) (CSE: ACRG). The two companies have entered into a definitive agreement where Acreage will grant Canopy Growth the right to acquire 100 percent of its shares. The agreement holds a requirement to do so when Cannabis production and sales become federally legal within the USA.
“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.”
Share value of Canopy Growth surged over 10% this morning post announcement. Whereas Acreage share value reached a new 52- week high of $30.