Canadian marijuana producer Canopy Growth has agreed to spend US$3.4 billion to acquire Acreage Holdings, a New York-based cannabis operator licensed in 20 states. In addition, Canopy will pay Acreage shareholders US$300 million.
Voting on the massive deal is now open for shareholders and will close at 10 a.m. EST on June 17. Approval is expected.
However, the merger is contingent upon the US federal government legalizing cannabis within the next seven and a half years.
The global legal marijuana market size is expected to be over $65 billion by 2025, and the Smith Falls, Ontario-based Canopy Growth seems poised to be a dominate player.
Acreage shareholders “are expected to benefit from accelerated expansion, improved scale, and a stronger market position in the US, powered by the IP and brand rights of the world's leading cannabis company,” according to a statement.
“For Canopy Growth shareholders, the transaction represents a clear path for Canopy Growth to enter the US cannabis market, when federally permissible, and will introduce its brands and consumer products in the US.”
As shareholder voting commences, Canopy’s stock recently traded down 2.7% to US$40.76 a share, while Acreage’s stock fell 1.7% to US$18.16 on the OTC Markets and was done 1.6% to US$18.19 on the CSE.
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