Canopy Growth to close Acreage deal next week

Canadian cannabis producer Canopy Growth Corp. (TSX: WEED) (Nasdaq: CGC) plans to complete its acquisition of U.S.-based Acreage Holdings Inc. (CSE: ACRG.A.U, ACRG.B.U) (OTCQX: ACRHF, ACRDF) next Monday, finally setting a firm timeline, though the deal’s value has essentially evaporated for some.

The transaction will transfer Acreage’s multi-state operations to Canopy USA, LLC, the company’s American subsidiary, according to a joint statement. The deal’s completion would mark Canopy’s largest step yet into the U.S. market, adding to its existing portfolio of American cannabis brands including Wana and Jetty.

Holders of Acreage’s floating shares will receive 0.045 Canopy shares per share when the deal closes in mid-December, the companies said. However, holders of Acreage’s fixed shares won’t receive any consideration unless Canopy’s stock price rises above $5 on the Nasdaq prior to closing, the companies previously said.

The exchange of shares will be handled through Odyssey Trust Company. Upon completion, Canopy USA will own 100% of Acreage’s issued and outstanding shares.

Canopy originally announced its intention to acquire Acreage in 2019, structuring the deal to comply with cross-border cannabis regulations. The company has since worked to shore up its finances ahead of closing, including a $100 million debt prepayment in October.

The companies noted ongoing labor disputes at Canada Post may affect document delivery to shareholders. Registered Acreage shareholders are encouraged to contact Odyssey Trust directly with questions about share exchanges.

Acreage posted a $22.2 million loss last quarter as revenue fell 30% to $39.6 million. The company reported $274.6 million in debt as of Sept. 30. Meanwhile, Canopy recorded a C$128 million loss in its latest quarter.