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Canada's Canopy Growth to buy Acreage for $3.4bn

By Michele Maatouk

Date: Thursday 18 Apr 2019

Canada's Canopy Growth to buy Acreage for $3.4bn

(Sharecast News) - Canadian cannabis company Canopy Growth has agreed to buy US-based Acreage for $3.4bn when the production and sale of cannabis becomes legal in the US.
Canopy chairman and co-chief executive officer Bruce Linton said: "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."

As part of the deal, the companies will also execute a licensing agreement granting Acreage access to Canopy's line-up of brands such as Tweed and Tokyo Smoke, along with other intellectual property. Until then, the two businesses will continue to operate independently.

Acreage chairman, CEO and President, Kevin Murphy, said: "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 US and continue expanding our US footprint. At the same time, a confluence of factors is making it much more difficult for a multi-state operator to achieve its full potential, including the enormous amount of cash required to scale.

At 1550 BST, Canopy shares were up 8.5% at CAD61.95 and Acreage shares were 3.8% higher at $23.35.

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