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Canopy Growth Implements Plan of Arrangement to Acquire US Multi-State Cannabis Operator Acreage Holdings


On June 27, 2019, Canopy Growth Corporation and Acreage Holdings, Inc. announced the implementation of a previously announced plan of arrangement under section 288 of the Business Corporations Act (British Columbia). Pursuant to the arrangement, the articles of Acreage have been amended to provide Canopy Growth with the option to acquire 100% of the shares of Acreage, with a requirement to do so upon a change in federal laws in the United States to permit the general cultivation, distribution and possession of marijuana or to remove the regulation of such activities from the federal laws of the United States, subject to the satisfaction of certain conditions. Canopy Growth is permitted to waive the requirement for there to be a change in US federal law prior to completion of the acquisition.

Pursuant to the arrangement, Acreage shareholders and holders of certain securities convertible or exchangeable into Acreage shares as of the close of business on June 26, 2019 will receive approximately US$2.63, being their pro rata portion of the up-front aggregate total payment of US$300 million from Canopy Growth.

Upon completion of the acquisition following the occurrence or waiver of the required changes in US federal law, holders of subordinate voting shares of Acreage will receive 0.5818 of a common share of Canopy Growth, subject to adjustment in accordance with the terms of the arrangement.

Cassels acted for Canopy Growth with a deal team that included John Vettese, Jonathan Sherman, Jamie Litchen, Andrea FitzGerald, John Christian, Stefanie Sebanc, Miriam El Ofir and David Singh (Securities, M&A and Cannabis), James Morand (Tax), and Bob Cohen and Jessica Lewis (Advocacy).

This deal features as one of Lexpert’s Top 10 Deals of 2019, and the winner of the Cannabis category. It was also honoured as Impact Deal of the Year for Ontario by the 2020 IFLR1000 Canada Awards and nominated for Cross Border Deal of the Year by the Canadian Law Awards.

RELATED EXPERTISE: Cannabis | Litigation | Mergers & Acquisitions | Securities | Taxation