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Acreage Holdings Inc (OTCMKTS:ACRGF) Gets Significant Advantage In The US Market On Acquisition Plans By Canopy Growth Corp (NYSE:CGC)

Canopy Growth Corp (NYSE:CGC)’s planned takeover provides an immediate and significant advantage in the competitive market of the US to Acreage Holdings Inc (OTCMKTS:ACRGF). As per the previously agreed acquisition plan, both the firms have submitted the management circulars under the approved arrangement by the court under the Business Corporations Act.

The transaction is subject to the waiver of changes in the federal law of the US to allow distribution, cultivation, and possession of marijuana. The deal is also subject to the approval of the Toronto Stock Exchange and New York Stock Exchange. It is also subject to the approval of the shareholders in a meeting scheduled on June 19, 2019.

Cash consideration

Following the deal, the shareholders of Acreage will receive upfront cash for each share up to $2.63. Each share of Acreage will be converted to 0.5818 share of Canopy. It is at a premium of 40% to the subordinate voting shares 30-day volume weighted average trading price on April 17, 2019, on the CSE. The shareholders of Acreage will also benefit from its ability to meet the set growth with reduced capital. The shareholders of Canopy will benefit from turnkey and accelerated access to the cannabis market in the US. This, together with the expertise of Canopy, will propel the growth.

Board approval

The board of directors of both the companies has unanimously supported the deal. Management circulars of both Canopy and Acreage outline the benefits and risks that arise from the transaction to the shareholders. The shareholders will receive the circulars by mail.

If the transaction is implemented, the combined entity will benefit from the improved product line, distribution networks, and complementary assets. Acreage will get access to the trademarks, operational expertise, and intellectual property of Canopy.

Canopy Stock surges

The stock of Canopy has surged on May 23, 2019, following the news of the acquisition of a This Works, skin Care Company based in the UK. The deal is valued at $54 million in cash. The product line of This Works comprises sleep aid products and skin care products. This is a crucial deal for Canopy since it banks on CBD and hemp strategy for integrated manufacturer/ marketing platform.

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Marijuana

Canopy Growth Corp (NYSE:CGC) Unveils Spectrum Therapeutics

Canopy Growth Corp (NYSE:CGC), a company specializing in the production and distribution of cannabis, hemp and cannabis devices today unveiled Spectrum Therapeutics. The business guru says Spectrum Therapeutics will be a global brand.

The purpose of Spectrum Therapeutics

The company has over the recent years directed resources towards clinical and medical research operations. These include the Canopy Health Innovations (CHI), Spectrum Cannabis, and C3 Cannabinoid Compound Company. The purpose for the formation of C3 Cannabinoid Compound Company was to develop cannabinoid-based medical therapies. Spectrum Therapeutics is set to encompass all these.

Analysts support the move to incorporate all these entities into a single unified ecosystem. According to them, this will help a huge deal in integrating the organization’s medical efforts. It is about establishing one diversified global healthcare enterprise.

Spectrum Therapeutics hopes is looking to focus in the production and the supply of the single and the full-spectrum cannabinoid medical products. Asides from that, it will promote education among patients and give them support they need. The healthcare practitioners also won’t be left behind in these efforts.

A lot of resources will be directed towards the pre-clinical and clinical research. Most importantly, the business hopes to succeed on its quest to develop leading cannabinoid-based medicines.

A focus into the future

Analysts have applauded Spectrum Therapeutics for the recent acquisition of C3.   They think it is at the brink of taking over market leadership in the medical cannabis on a global scale. Spectrum Therapeutics will dedicate resources and efforts empowering physicians in Europe and the world at large.

The goal will be to educate them on the wide range of therapies drawn from the various cannabinoid-based medicines. Dronabinol, which happens to be C3‘s cannabinoid pharmaceutical drug can now be traced in stores in Switzerland, Germany, Austria, and Denmark. Dronabinol is going to be markete4d under the Bionorica Ethics branding.

The Canopy Growth Chief Medical Officer Dr. Mark Ware opines, “We also offer education for patients and healthcare professionals and are engaged in research to define the safety and efficacy of cannabinoid medicines and the development of new cannabinoid-based treatments.”

Spectrum Therapeutics says it will confirm that countries seeking to benefit from its medical cannabis education fall within the legal regulatory frameworks.

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Marijuana

Constellation Brands (NYSE:STZ) Signs Agreement With Canopy Growth Corporation (NYSE:CGC) For Modification Of Warrants And Rights

Constellation Brands (NYSE:STZ) has announced plans to enter into an agreement with Canopy Growth Corporation (NYSE:CGC) for the modification of certain rights and warrants. The modifications are a result of Canopy’s plans of acquiring Acreage Holdings Inc. (OTCMKTS:ACRGF) following federal legalization of cannabis.

Constellation to waive its veto rights

Canopy has already announced the option of acquiring acreage shares upon federal cannabis legalization in the US. The proposed acquisition, as well as the modification of Constellation warrants, is subject to the approval of shareholders. Following the plans, Constellation has agreed that it will relinquish its veto rights to the transaction under the proposed modifications to warrants and other rights.

Besides the 18.9 million warrants related to the 2017 Canopy Investment, the company currently holds 139.7 million warrants that will become exercisable for a period of between five and eight years upon shareholder approval. This will include the 88.5 million Tranche A warrants expected to be exercisable at C$50.40 per share and 51.2 million of Tranche B warrants of which 75% or 38.4 million will be exercisable at C$76.68 per share while the remaining 25% will become part of Tranche C warrants exercisable at the five-day weighted average price of Canopy’s common stock on the Toronto stock exchange.

However, even if Canopy were to exercise its right to acquire Acreage whereas constellation was to exercise its outstanding Canopy warrants its ownership of Canopy cannot exceed 50%.

Canopy to reacquire 25% of warrants issued to Acreage

Nonetheless, if Constellation chose to fully exercise Tranche A warrants, Canopy will reacquire the lesser of the 25% of its issued warrants to Acreage or commit dollar amount equivalent to the 25% implied enterprise value of Acreage within two years from the date Constellation exercises its warrant. Prior to termination or exercising of its warrants, Constellation will have the option of purchasing approximately 20 million of Canopy shares whereby for each share purchased the Tranche B warrant will be reduced by one.

Constellation will maintain its current representation level on Canopy’s Board.

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Marijuana

Canopy Growth Corporation (NYSE:CGC) Signs Definitive Agreement To Acquire US Cannabis Operator Acreage Holdings Inc. (OTCMKTS:ACRGF)

Canopy Growth Corporation (NYSE:CGC) has entered into a definitive agreement with Acreage Holdings Inc. (OTCMKTS:ACRGF) which grants Canopy Growth rights of acquisition of 100% of the Acreage shares once it becomes federally legal to sell and produce cannabis in the US. The agreement is however subject to requisite approval of the Canopy Growth and Acreage shareholders and the approval of British Columbia’s Supreme Court.

Acreage to receive $300 million from the transaction

Following approval under the terms of the agreement, Acreage expects to receive an immediate payment of about $300 million or around $2.55 per subordinate voting share of Acreage based on the current outstanding voting shares as well as the conversion of certain securities. Equally on top of the exercising of the right of subordinate shares acreage will also receive 0.5818 of canopy shares for each share held at the time of concluding the transaction. Once the transaction is finalized the total consideration payable will be $3.4 billion which represent 41.7% over Acreage’s 30-day weighted average price on the Canadian Stock Exchange.

The two companies intend to execute a licensing agreement that will grant Acreage access to the brands of Canopy such as Tokyo smoke as well as other intellectual property rights.

Transaction to enable the companies to expand their footprint

Canopy Growth CEO and Chairman, Bruce Linton stated that they announced the complex transaction with a simple aim. The acquisition of Acreage is a way of entering the US market immediately the federal laws permits trading in cannabis products. He added that the combination with Acreage’s assets, licenses, and management team with Canopy’s brands is a great opportunity that will create value addition to the companies’ shareholders.

Acreage Holding CEO, Kevin Murphy said that transaction will help the company accomplish its objectives as well as delivering value to shareholders. Access to Canopy’s resources will enable Acreage to innovate, produces as well as distribute cannabis brands in the US and also expand the company’s footprint.

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Marijuana

Canopy Growth Corp (NYSE:CGC) Gets Its Food Into The European Market Through Cafina Acquisition

Canopy Growth Corp (NYSE:CGC) recently announced that it finalized its acquisition of Cafina, a licensed cannabis producer that is based in Spain in an all-cash deal.

The acquisition marks a key milestone for Canopy Growth because it represents an opportunity to tap into the European cannabis market. Cafina which also goes by the name Cáñamo y Fibras Naturales, S.L is one of Europe’s companies that have acquired a license to produce cannabis. Cannabis Growth will use the European firm to expand its marijuana production activities in a region that is considered among the best for cannabis growth.

Canopy Growth acquires Cafina

Cafina is based in Spain where it is licensed to cultivate and distribute cannabis that contains over 0.2% of the 0.2% of tetrahydrocannabinol (THC) chemical. The firm’s products are mainly used for research and medical purposes and are even exported to other countries and it also has a license to. Cafina runs its production activities in a greenhouse that measures 1,600 sq. ft. Canopy Growth has also secured a supply agreement with another Spanish-company that produces cannabis flowers.

Cafina came into existence in 2014 and its operations are based in the Alicante province in Spain. It has a strong team that is focused on crop R&D, hemp seed sales and cannabis production. It received its research and general license for cannabis from the Spanish Agency for Medicines and Health Products (AEMPS) in November last year.

“Operating multiple production assets within Europe will allow us to increase revenue in the EU free of supply constraints,” stated Canopy Growth CEO, Mark Zekulin.

The CEO also noted that his company is investing in low-cost and scalable production facilities of the two European countries. According to Zekulin’s announcement, it is a strategic acquisition because it aligns with the strategy that the company uses in Canada where it has cannabis production facilities distributed across seven different provinces.

Canopy Growth is one of the most successful companies in the cannabis and hemp industry. Its stock grew by 79% in 2018 and the announcement about the Cafina acquisition influenced the stock to surge by more than 4%.

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Marijuana

Canopy Growth Corp (NYSE:CGC) To Acquire Hiku Brands Co.; CEO Linton Confident Of Making Money Even If Pot Prices Drop

Canopy Growth Corp (NYSE:CGC) recently struck a fully diluted deal worth $350 million with Hiku Brands Co. Ltd. the owner of cannabis clothing and accessories selling Tokyo Smoke chain of coffee shops. With this deal that also includes options and warrants, the Ontario-based cannabis producer will gain 100% acquisition of the retailer.

Hiku is a budding company with all its attention focused on retail and its early steps have helped it create a brand identity among the clients by giving them an exclusive experience at its stores. The Chief Executive Officer at Canopy, Bruce Linton said that the retailer is thinking about products, brands, and alcoholic customer loyalty in a very smart way. Going forward, Hiku will sell recreational cannabis through its stores once it becomes legal from October 17, 2018.

The retailer has also applied for licenses in Alberta and will use the strategy in every province where private ownership is allowed. It seems that there will be a give and take relationship between Canopy and Hiku. According to Linton, “They need product to fill the stores. And we want to be able to have more and more stores. The reason Apple and Lululemon do well is they don’t sell you a computer or a workout outfit; they give an education platform and an experience. I think when you exit prohibition, you want to do that.”

The deal between Canopy and Hiku will be sealed only after two-thirds of shareholders of the retailer approves of it. The meeting for approval is expected to take place in August.

Drop in price will not affect Canopy, says Linton

 The CEO of Canopy, the largest marijuana company in the world is dreaming big as very shortly recreational cannabis will be legalized in Canada. The company has already started planning beyond dried bud and is aiming to get pharmaceutical patents and a big slice of the future marijuana beverage industry. According to Linton, even if the price of cannabis and related products comes down to zero, his company will still continue to make money.

The current month has been quite a busy one for Canopy as it acquired a medical marijuana company from Columbia, launched a Latin American subsidiary and then now has struck a deal with Hiku, the retail cannabis chain.

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