representative work

Canopy Growth and Acreage Implement Amended Arrangement


On September 23, 2020, Canopy Growth Corporation and Acreage Holdings, Inc. announced they have implemented the previously announced amended arrangement under section 288 of the Business Corporations Act (British Columbia) involving Acreage and Canopy Growth (the “Amended Arrangement”).

Pursuant to the Amended Arrangement, Acreage’s articles were amended to create two new classes of shares, the “Fixed Shares” and “Floating Shares”. Each existing Acreage share was exchanged for 0.7 of a Fixed Share and 0.3 ‎of a Floating Share (with proportionate adjustments for Acreage’s existing proportionate voting shares). Holders of Acreage shares and certain convertible securities also received approximately US$0.30 per share, being their pro rata portion of an upfront payment of  approximately US$37.5 million from Canopy Growth.

In accordance with the Amended Arrangement, upon ‎the occurrence (or waiver by Canopy Growth) of changes in federal laws in the United States related to cannabis, Canopy Growth will, subject to the ‎satisfaction or waiver of certain closing conditions, acquire ‎all of the issued and outstanding Fixed Shares on the basis of 0.3048 of a common share of Canopy Growth per ‎Fixed Share. Canopy Growth also holds an option, exercisable at the discretion of Canopy Growth, to acquire all of the ‎issued and outstanding Floating Shares at the time that Canopy Growth acquires the Fixed Shares, for ‎cash or Canopy Growth shares, as Canopy Growth may determine, at a price per Floating Share based ‎upon the 30-day volume-weighted average trading price of the Floating Shares on the CSE relative to the trading price of the Canopy Growth shares, subject to a minimum price of US$6.41 per Floating Share. ‎

In addition, in connection with the Amended Arrangement, a subsidiary of Canopy Growth advanced US$50 million to Universal Hemp, LLC, a subsidiary of Acreage, pursuant to the terms of a secured debenture. An additional US$50 million may be advanced pursuant to the debenture subject to the satisfaction of certain conditions.

Cassels acted for Canopy Growth with a deal team that included Jonathan Sherman, Jamie Litchen, Jeffrey Roy and Tayyaba Khan (Securities, M&A and Cannabis), Chuck Rich, Daniel Cipollone and Paras Patel (Banking & Specialty Finance and Cannabis), Jessica Lewis (Litigation), and Chris Norton (Tax).