Canopy Growth and Acreage Holdings Marijuana Deal is approved by the Shareholder
Photograph by Chris Roussakis / Bloomberg
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Canada's leading marijuana producer
Canopy Growth
said Wednesday that the shareholders approved their agreement to acquire the US cannabis chain Acreage Holdings-conditional on the US legalizing the growth, sale and possession of the drug. While legally in those countries where Areal operates, marijuana is still illegal under US federal law.
Over 99% of the voting shareholders approved the transaction, Canopy said. In retrospect, Canopy Stock (ticker: CGC) was basically flat at $ 42.85. Trading over the counter and on the Canadian Securities Exchange (ACRGF or ACRG.U.Canada) closed the stock 3% Wednesday to $ 19.56.
The companies said they were hoping to complete the first phase of the deal this month, including a $ 300 million cash payment that will go to shareholders, but not the New York-based company itself. Canopy has claimed, from immediate access to Canopy's cannabis brands and know-how, as well as the ability to make acquisitions by issuing more than $ 1 billion in securities that could eventually convert to Canopy stocks if the congress allows the drug.
See our interview with the cannabis industry: Why Aphria is a better Marijuana stock than Cronos, according to an analyst
If the stated changes in US law arise, Canopy will swap 0.5818 of a share for each share of the share. When the announced agreement in April, the companies reviewed Canopy's $ 3.4 billion offer.
With Canopy himself supported by 38% owner
Constellation Brands
(STZ), the addition of Acreage will make for a formidable North American alcohol and cannabis business. Canadian rivals
Aurora Cannabis
(ACB),
Tilray
(TLRY), and Aphria (APHA) will now be pushed to keep pace. Canopy also said Wednesday that it is building its US production of the cannabidiol or CBD now the federal legal ingredient of the cannabis strain hemp. These operations will be used for marijuana when federal law permits.
"Carrying out the
Write to Bill Alpert at william.alpert@barrons.com
