Canopy Growth Corporation (TSX:WEED) (NASDAQ:CGC) said on Monday that it has fully acquired Acreage Holdings, Inc. (CSE:ACRG, ACRG.B.U)) (OTCQX: ACRHF, ACRDF) via Canopy USA, LLC, its US-domiciled holding company.
Canopy USA, created in 2022 to streamline the Canadian cannabis giant’s entry into the US market, now owns 100% of the issued and outstanding shares of Acreage.
Background
The $3.4 billion acquisition deal was first announced in 2019. Initially, the deal was to be undertaken should the U.S. legalize marijuana on a federal level. That deal was later restructured.
The deal outlined Canopy's plan to acquire all Class E subordinate voting shares of Acreage. This acquisition followed the purchase of the Class D shares of Acreage, based on an agreement from October 24, 2022.
Acreage pointed out in November the deal could leave holders of Acreage’s Class E shares (fixed shares) with nothing if Canopy’s stock price remains below $5 when the deal closes.
Canopy Growth’s shares traded 1.6667% higher at $3.66 per share during the pre-market session on Monday morning.
Canopy USA also allowed Canopy to previously acquire 100% of Wana Wellness, LLC, The CIMA Group, LLC and Mountain High Products, LLC, as announced on October 9, 2024 and approximately 77% of the shares of Lemurian, Inc. (Jetty) as announced on June 4, 2024, while also holding a minority stake in TerrAscend. Corp. (TSX:TSND) (OTCQX:TSNDF).
Read Also: The U.S. Cannabis Strategy No One’s Talking About: Inside Canopy’s $300M Plan
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Why It Matters
David Klein, CEO of Canopy Growth, said that Canopy USA is now a unified platform ready to capitalize on the growing U.S. cannabis market without the need for federal legalization. It has a strong presence across key states and licensing agreements for asset-light operations.
“With a vertically integrated presence across key U.S. states in the Midwest and Northeast, as well as licensing agreements which support asset-light operations in state-legal markets nationally, Canopy USA is well positioned to demonstrate efficient growth ahead,” Klein said.
What's Next
Canopy USA aims to capture a share of the U.S. retail cannabis market, projected to reach $50 billion by 2026, with a brand portfolio designed to drive growth in the fastest-growing cannabis categories, the company noted.
In late November 2024, the company's board of directors named Luc Mongeau the new CEO, effective Jan. 6, 2025. Mongeau, a CPG veteran and board member at the Canadian cannabis giant, succeeds Klein, who announced his plans to retire in August.
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