Acreage and Canopy enter into new U.S. strategic arrangement

On October 25, 2022, Acreage Holdings, Inc. (“Acreage”) announced that Canopy Growth Corporation (“Canopy”) would acquire 100% of Acreage by i) waiving an existing floating share option and entering into a new floating share acquisition agreement (“Floating Share Agreement”); and ii) committing to exercise a fixed share option.

Pursuant the Floating Share Agreement, Canopy USA, LLC (“Canopy USA”), Canopy’s newly-created U.S. domiciled holding company, will acquire all of Acreage’s issued and outstanding Class D subordinate voting shares (the “Floating Shares”) by way of court-approved plan of arrangement. Each floating share will be exchanged for consideration of 0.4500 of a common share of Canopy (each whole share a “Canopy Share”), representing a premium of 17.2% to the Floating Shares.

Concurrently, upon entering into of the Floating Share Agreement, Canopy irrevocably waives its option to acquire the Floating Shares pursuant to the plan of arrangement implemented on September 23, 2020 (the “Existing Arrangement”) pursuant to the arrangement agreement between Canopy and Acreage dated April 18, 2019, as amended (the “Existing Arrangement Agreement”).

Subject to the provisions of the Floating Share Agreement, Canopy agreed to exercise its option pursuant to the Existing Arrangement Agreement (the “Fixed Option”) to acquire Acreage’s outstanding Class E subordinate voting shares (the “Fixed Shares”), representing approximately 70% of the total shares of Acreage as at the date hereof, at a fixed exchange ratio of 0.3048 of a Canopy Share for each Fixed Share.

Upon exercise of the Fixed Option and completion of the Floating Share Arrangement, Canopy USA will own 100% of all outstanding Fixed Shares and Floating Shares.

Acreage expects the Floating Share Arrangement to close in the second half of 2023, subject to receipt of shareholder, court, and regulatory approvals, as well as the satisfaction or waiver of all conditions under the Floating Share Agreement and the Existing Arrangement. It is anticipated that the acquisition by Canopy USA of the Fixed Shares pursuant to the Fixed Option will be completed immediately following closing of the Floating Share Agreement.

Further information can be found on Globe Newswire’s website.

Acreage is a multi-state operator of cannabis ‎cultivation and retailing facilities in the U.S., including its national retail store ‎brand, The Botanist.

Canopy is a global, best-in-class cannabis company and consumer packaged goods (CPG) organization with the intention to unleash the power of cannabis to improve lives.