Today, the company officially announced that it was confirming those rumors, offering a massive $3.4 billion to gain the rights to buy out the largest multi-state operator in the United States, Acreage Holdings (TSXV: ACRG.U).
“Today we announce a complex transaction with a simple objective. Our right to acquire Acreage secures our entrance strategy into the United States as soon as a federally-permissible pathway exists. By combining Acreage’s management team, licenses and assets with Canopy Growth’s intellectual property and brands, there will be tremendous value creation for both companies’ shareholders,” said Bruce Linton, Canopy Chairman and co-CEO.
Acreage Holdings has 22 separate cultivation and processing sites alongside 87 dispensaries spread across 20 states. Among it’s Board of Directors include former Canadian Prime Minister Brian Mulroney and former Speaker of the U.S. House of Representatives John Boehner, making Acreage one of the best politically-connected cannabis companies in the world.
“From the first day we created our company, providing exceptional customer care and delivering shareholder value have been our top priorities. This transaction will help accomplish both. When the right is exercised having access to Canopy Growth’s deep resources will enable us to innovate, develop and distribute quality cannabis brands across the U.S. and continue expanding our U.S. footprint. At the same time, a confluence of factors are making it much more difficult for a multi-state operator to achieve its full potential, including the enormous amount of cash required to scale,” added Acreage CEO and President Kevin Murphy, who assumed the position from the company’s former President George Allen who left effective immediately once the agreement was signed. “Our Board of Directors, management team and I are pleased to deliver significantly increased liquidity to our shareholders and put ourselves in an even stronger position to deliver continued and significant upside.”
The $3.4 billion buyout represents one of the largest acquisitions in the cannabis industry’s history. The last multi-billion-dollar purchase in the sector was relatively recently in April when Cresco Labs Inc announced they were purchasing Origin House for C$1.1 billion.
According to the source that first revealed this information yesterday, Canopy Growth had considered a number of other acquisition targets, suggesting other possible buyouts in the new future.
Shares of Canopy Growth already jumped 10 percent yesterday when the rumor first broke, so much of that excitement was already reflected in today’s stock price. Regardless, Canopy Growth ended today up 4.4 percent in. Acreage Holdings also shot up significantly yesterday, around 10 percent as well, before returning most of those gains today.
Canopy Growth Company Profile
Canopy Growth Corp through its subsidiaries is the licensed producer of medical marijuana in Canada. The company grows, produces and sells medical marijuana. It operates diverse brands and variety supported by over half million square feet of indoor and greenhouse marijuana production.
It sells medical marijuana under various brand names including Tweed, Bedrocan, and Mettrum. A majority of the revenue is derived from the sale of medical marijuana by Tweed and Bedrocan in Canada. – Warrior Trading News