Canada's leading marijuana producer
said Wednesday that shareholders approved its deal to acquire the American cannabis chain Acreage Holdings-contingent on the U.S. legalizing the growth, sale, and possession of the drug. While legal in the states where Acreage operates, marijuana is still illegal under U.S. federal law.
Over 99% of the voting shareholders approved the transaction, Canopy said. In after-hours trading, Canopy stock (ticker: CGC) was basically flat at $ 42.85. ACRGF or ACRG.U.Canada, Acreage closed up 3% Wednesday, at $ 19.56.
The companies said they were hoping to complete the deal this month, including A $ 300 million cash payment that will go to Acreage stockholders, but not the New York-based company itself. Acreage wants benefit, Canopy has argued, from immediate access to Canopy's brands and know-how, plus the ability to make acquisitions by issuing over $ 1 billion worth of securities that could eventually be converted into canopy stock.
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If the specified changes in U.S. Canopy will exchange 0.5818 of a share for each share of Acreage. When they announced the deal in April, the companies valued Canopy's offer at $ 3.4 billion.
With Canopy itself backed by 38% owner
(STZ), the addition of Acreage would make for a formidable North American alcohol and cannabis enterprise. Canadian rivals
(TLRY), and Aphria (APHA) wants now pressed to keep pace. Canopy, therefore, said that it is building its U.S. production of cannabidiol-or CBD-the now federally legal ingredient of the cannabis strain hemp. Those operations would be used for marijuana, once federal law permits.
"Completion of the