Acreage Holdings, Inc. (“Acreage Holdings”), a leading U.S. multi-state cannabis operator, and Canopy Growth Corporation (“Canopy Growth”) announced the implementation of an arrangement, pursuant to which Canopy Growth received the option (the “Option”) to acquire all of the issued and outstanding shares in the capital of Acreage Holdings, with a requirement to do so, upon a change in United States federal laws to permit the general cultivation, distribution and possession of marijuana (as defined in the relevant legislation) or to remove the regulation of such activities from the federal laws of the United States.
Closing of the transaction will also be subject to the satisfaction of certain conditions. DLA Piper Canada represented Acreage Holdings in this transformative transaction within the global cannabis industry.
Acreage shareholders will receive an immediate aggregate payment of USD$300 million. In addition, upon exercise of the Option, holders of Acreage Holdings Subordinate Voting Shares will receive 0.5818 of a Canopy Growth Common Share for each Subordinate Voting Share held. Upon exercise of the Option, the total consideration payable pursuant to the transaction is valued at approximately US$3.4 billion on a fully-diluted basis, based on the price of the Acreage Holdings Subordinate Voting Shares on the Canadian Securities Exchange at the time the transaction was announced.
In connection with the Arrangement, Acreage Holdings, Canopy Growth and certain of Canopy Growth’s subsidiaries entered into a licensing agreement granting Acreage Holdings access to Canopy Growth’s award-winning line-up of brands, such as Tweed and Tokyo Smoke, along with other intellectual property. Once the Option is exercised, Acreage Holdings will become part of Canopy Growth, the leading global cannabis company with access to markets beyond the U.S.
DLA Piper Canada acted as Canadian counsel to Acreage Holdings with a deal team led by Robert Fonn and Russel Drew, and including Campbell Fitch, Kevin Fritz (Tax), Brent MacLean (Commercial Litigation), Sydney A. Kert, Jamie Mandell, Nicole Kapos and Christopher Pejovic.
DLA Piper (Canada) has vast knowledge and experience in the legal cannabis industry and is considered a go-to firm for all matters related to this rapidly growing and complex area. With our expertise in capital markets, M&A, going public transactions, private equity and venture capital, intellectual property, regulatory and employment matters, our lawyers have advised an impressive array of leading licenced producers, licenced dealers, retailers, laboratories, pharmaceutical companies, investment dealers, service providers, and various start-ups and established businesses on a full range of legal issues relating to the cannabis industry.