Canadian cannabis company Canopy Growth — say that five times fast — purchased the rights to acquire NYC-based Acreage Holdings for $3.4B… but there’s a catch. The acquisition won’t go through until US weed is federally legalized, and it has an expiration date 7.5 years out.
A ‘joint’ venture of the highest caliber
Canopy — which is 38% owned by Constellation Brands thanks to a $4B investment — is the world’s most valuable cannabis company. The deal will make Canopy best buds with Acreage Holdings, one of the US’s largest multi-state cannabis operators. Acreage’s expanding chain of The Botanist dispensaries includes 25 locations across 12 states.
Side notes: Acreage board member John Boehner (yes, former US Speaker of the House John Boehner) stands to make a pretty penny off this dank deal. Also, Canopy has announced partnerships with Martha Stewart and Seth Rogen — the ganja’s all here.
Hashing out an unusual deal
This “complex transaction with a simple objective” is designed to avoid issues on Toronto and NY stock exchanges, which both prohibit listing companies that violate US federal law.
If the clock runs out, it’s unclear what will happen to the $300m cash Canopy agreed to front Acreage shareholders.
But time’s moving reallyyyy slowlyyyy… so they’ll probably be okay.
Canada’s gotten a head start on cannabis-related biz since it legalized weed last October. But as companies look to secure footholds in the budding North American market, this trail-blazing move will likely spark similar cross-border deals on top of more traditional acquisitions.