Canopy Growth Corp. agreed to buy Acreage Holdings Inc. for $3.4 billion in a cross-border cannabis deal that’s conditional on the U.S. eventually legalizing pot for recreational use.
Canopy, the world’s largest pot company, will initially pay $300 million in cash to shareholders of New York-based Acreage, the companies said in a release Thursday. Shareholders will receive a further 0.5818 of a Canopy share when cannabis becomes federally legal in the U.S., representing a 42 percent premium over Acreage’s 30-day average price.
Canopy has been looking for an entry point into the U.S. pot market but is restricted by its listings on the Toronto Stock Exchange and the New York Stock Exchange, both of which prohibit trading by companies that are violating U.S. federal law. Canopy also has a high-profile investment from Constellation Brands Inc., the Victor, New York-based alcohol giant that makes Corona beer.