Canopy Growth Files Circulars For Acquisition Of Acreage

ME Staff
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Canopy Growth Files Circulars For Acquisition Of Acreage

Canopy Growth Corp (NYSE:CGC) and Acreage Holdings Inc. (OTCMKTS:ACRGF) have announced the filing of management information circulars as well as associated voting materials relative to a proposal that was previously announced for Canopy Growth to acquire Acreage in line to an approved agreement under the British Columbia Business Corporation Act.

Transaction completion depends on review of federal laws

The completion of the transaction depends on changes in the US federal law to allow possession, growing and supply of marijuana or the removing of regulations restricting such activities under the federal law. Canopy Growth is allowed give up the Triggering Event and they plan to do so once the Toronto Stock Exchange and New York Stock Exchange policies permit the finalization of the transaction provided third party agreement will not be violated like the one between Canopy Growth and Constellation Brands Inc. (NYSE:STZ).

The transaction is subject to shareholder approval from both Acreage and Canopy Growth and they have both scheduled the meetings on June 19, 2019. The decision to adopt the arrangement will have to be approved by at least two thirds of the shareholders of Acreage. Equally, the arrangement resolution can be approved by a simple majority of votes cast by Subordinate Voting Shares and the Proportionate Voting Shares voted in a single class. However this will have to exclude shares held by Acreage CEO Kevin Murphy.

Transaction beneficial to shareholders of both companies

Both companies expect the transaction to deliver considerable benefits that will enhance growth of Acreage in the US through the support and expertise of Canopy Growth. For Canopy Growth this is an excellent pathway into the US market through a company that is already delivering at a national level. They will also get to benefit from the operations and management team that is comprised of top executives with vision in the industry to help in executing Acreage’s footprint of managed and licensed assets.

Canopy Growth and Acreage board of directors have already approved the transaction except those who desisted from voting and each has recommended that the shareholders vote for the same.