After weeks of speculation, it is official. Canopy Growth Corp. (NYSE: CGC) has announced that the company’s shareholders have voted overwhelmingly in favor of acquiring Acreage Holdings, Inc. (OTCMKTS: ACRGF).
Although the deal was announced last April, certain shareholders in recent weeks had suggested that the company may not have enough votes to approve the acquisition. With approval from approximately 99% of Canopy shareholders, those suggestions proved to be incorrect.
“On behalf of Canopy Growth, I thank the shareholders of both companies for their vote of confidence in this historic transaction,” said Bruce Linton, Chairman and Co-CEO of Canopy Growth. “Completion of the Transaction is intended to position us to efficiently and effectively enter the US cannabis market once federally permissible. Alongside our international market strategies and US Hemp strategy, we believe the acquisition of Acreage will be a key step in bolstering our position as a truly global company.”
Valued at $3.4 billion, the acquisition represents one of the largest in cannabis history. However, the deal is not yet done. The acquisition still needs to be approved by the Supreme Court of British Columbia and the deal will not take effect until the United States federally legalizes adult-use cannabis.
Once the deal is consummated, Acreage shareholders will receive a payment of $300 million or approximately $2.55 per Acreage Subordinate Voting Share. Holders of subordinate voting shares of Acreage will also receive 0.5818 of a common share of Canopy Growth stock for each Acreage subordinate voting share held at the time of closing of the transaction.
Altogether, Acreage shareholders will hold approximately 12.1% ownership in Canopy Growth (on a pro forma basis) and up to 16.6% if permitted acquisitions are completed prior to the Trigger Event. At this time, it is unclear whether Acreage’s more famous directors such former Speaker John Boehner, former Canadian Prime Minister Brian Mulroney and former Massachusetts Governor and current Presidential candidate Bill Weld will sit on the new board.