SMITHS FALLS, ON and
NEW YORK, June 21, 2019 /PRNewswire/ - Acreage
Holdings, Inc. ("Acreage") (CSE:ACGR.U) (OTC: ACRGF) (FSE:
0ZV) and Canopy Growth Corporation ("Canopy Growth") (TSX:
WEED) (NYSE: CGC) (together, the "Companies") are pleased to
announce that Acreage has obtained a final order from the Supreme
Court of British Columbia
approving the previously announced arrangement under section 288 of
the Business Corporations Act (British Columbia) with Canopy Growth (the
"Arrangement").
Pursuant to the Arrangement, the Articles of Acreage will be
amended to provide Canopy Growth with the option (the "Canopy
Growth Call Option") to acquire all of the issued and
outstanding shares in the capital of Acreage (each, an "Acreage
Share"), 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 (as defined in the relevant legislation) or to remove the
regulation of such activities from the federal laws of the United States (the "Triggering
Event"), subject to the satisfaction of the conditions set out
in the arrangement agreement entered into between Acreage and
Canopy Growth on April 18, 2019, as
amended on May 15, 2019 (the
"Arrangement Agreement"). Canopy Growth is permitted to
waive the Triggering Event and intends to do so as soon as the
policies of the New York Stock Exchange ("NYSE") and/or the
Toronto Stock Exchange ("TSX") permit completion of the
acquisition, provided that completion would not violate any
third-party agreements, including those entered into by Canopy
Growth with Constellation Brands, Inc.
Acreage and Canopy Growth anticipate implementing the
Arrangement on or about June 27, 2019
(the "Initial Effective Date"). Holders of Acreage
Shares and certain securities convertible or exchangeable into
Class A subordinate voting shares of Acreage (the "Subordinate
Voting Shares") as of the close of business on June 26, 2019, the business day immediately
preceding the Initial Effective Date (the "Record Date"),
will be entitled to receive their pro rata portion (on an as
converted to Subordinate Voting Share basis) of US$300,000,000 (the "Option Premium")
being paid by Canopy Growth to such persons as consideration for
granting the Canopy Growth Call Option. It is expected that the
Option Premium will be distributed to such holders of record on or
before the third business day following the Initial Effective Date.
Pursuant to the payment of the Option Premium, each holder of
Acreage Shares and certain other eligible holders of securities
exchangeable for Acreage Shares will receive approximately
US$2.63 per Subordinate Voting Share
(on an as converted to Subordinate Voting Share basis), with the
final amount to be received by each holder determined based on the
number of Subordinate Voting Shares into which all of the eligible
securities would be converted at the close of business on the
Record Date.
As previously announced, each of Acreage and Canopy Growth
received all necessary shareholder approvals in connection with the
Arrangement at their respective special shareholder meetings held
on June 19, 2019.
Following completion of the Arrangement and upon the occurrence
or waiver of the Triggering Event, Canopy Growth will exercise the
Canopy Growth Call Option and, subject to the satisfaction or
waiver of the conditions to closing set out in the Arrangement
Agreement, acquire (the "Acquisition") each of the
Subordinate Voting Shares (following the automatic conversion of
the Class B proportionate voting shares and Class C multiple voting
shares of Acreage into Subordinate Voting Shares) in exchange for
the payment of 0.5818 of a common share of Canopy Growth (each
whole common share, a "Canopy Growth Share") per Subordinate
Voting Share (subject to adjustment in accordance with the terms of
the Arrangement).
The Companies believe that the Acquisition will deliver
significant benefits that will help accelerate the growth of
Acreage across the United States
powered by the expertise of the world's leading cannabis company.
In turn, Canopy Growth shareholders will benefit from a national
turnkey platform in the United
States.
Additional Details
For more information about the Arrangement and the Acquisition
please see the respective information circulars of each of Canopy
Growth and Acreage dated May 17,
2019, which are available on Canopy Growth and Acreage's
respective issuer profiles on SEDAR at www.sedar.com.
About Canopy Growth
Canopy Growth (TSX:WEED, NYSE:CGC) is a world-leading
diversified cannabis, hemp and cannabis device company, offering
distinct brands and curated cannabis varieties in dried, oil and
Softgel capsule forms, as well as medical devices through Canopy
Growth's subsidiary, Storz & Bickel GMbH & Co. KG. From
product and process innovation to market execution, Canopy Growth
is driven by a passion for leadership and a commitment to building
a world-class cannabis company one product, site and country at a
time. Canopy Growth has operations in over a dozen countries across
five continents.
Canopy Growth's medical division, Spectrum Therapeutics is
proudly dedicated to educating healthcare practitioners, conducting
robust clinical research, and furthering the public's understanding
of cannabis, and has devoted millions of dollars toward cutting
edge, commercializable research and IP development. Spectrum
Therapeutics sells a range of full-spectrum products using its
colour-coded classification Spectrum system as well as single
cannabinoid Dronabinol under the brand Bionorica Ethics.
Canopy Growth operates retail stores across Canada under its award-winning Tweed and Tokyo
Smoke banners. Tweed is a globally recognized cannabis brand which
has built a large and loyal following by focusing on quality
products and meaningful customer relationships.
From our historic public listing on the Toronto Stock Exchange
and New York Stock Exchange to our continued international
expansion, pride in advancing shareholder value through leadership
is engrained in all we do at Canopy Growth. Canopy Growth has
established partnerships with leading sector names including
cannabis icons Snoop Dogg and Seth
Rogen, breeding legends DNA Genetics and Green House Seeds,
and Fortune 500 alcohol leader Constellation Brands, to name but a
few. Canopy Growth operates eleven licensed cannabis production
sites with over 4.7 million square feet of production capacity,
including over one million square feet of GMP certified production
space. For more information visit www.canopygrowth.com.
About Acreage
Headquartered in New York City,
Acreage is the largest vertically integrated, multi-state owner of
cannabis licenses and assets in the U.S. with respect to the number
of states with cannabis related licenses, according to publicly
available information. Acreage owns licenses to operate or has
management services or consulting agreements in place with license
holders to assist in operations in 20 states (including pending
acquisitions) with a population of approximately 180 million
Americans, and an estimated 2022 total addressable market of more
than $17 billion in legal cannabis
sales, according to Arcview Market Research. Acreage is dedicated
to building and scaling operations to create a seamless,
consumer-focused branded cannabis experience. Acreage's national
retail store brand, The Botanist, debuted in 2018.
Forward-Looking Statement
This news release contains "forward-looking statements" within
the meaning of the United States Private Securities Litigation
Reform Act of 1995 and "forward-looking information" within the
meaning of applicable Canadian securities legislation. Often, but
not always, forward-looking statements and information can be
identified by the use of words such as "plans", "expects" or "does
not expect", "is expected", "estimates", "intends", "anticipates"
or "does not anticipate", or "believes", or variations of such
words and phrases or state that certain actions, events or results
"may", "could", "would", "might" or "will" be taken, occur or be
achieved. Forward-looking statements or information involve known
and unknown risks, uncertainties and other factors which may cause
the actual results, performance or achievements of the Companies or
their respective subsidiaries to be materially different from any
future results, performance or achievements expressed or implied by
the forward-looking statements or information contained in this
news release. These forward-looking statements include, but are not
limited to, statements with respect to the implementation of the
Arrangement and the timing for its completion; the satisfaction of
closing conditions to the Arrangement, including compliance by the
Companies with various covenants contained in the Arrangement
Agreement; the timing and outcome of the Acquisition; the intention
of Canopy Growth to waive the Triggering Event as soon as the
policies of the NYSE and/or the TSX permit completion of the
Acquisition; the anticipated benefits of the Acquisition to the
Companies and their respective securityholders; and the impact of
the Acquisition and anticipated growth of the Companies.
Risks, uncertainties and other factors involved with
forward-looking information could cause actual events, results,
performance, prospects and opportunities to differ materially from
those expressed or implied by such forward-looking information,
including assumptions as to the ability of the parties to receive,
in a timely manner and on satisfactory terms, the necessary
regulatory approvals; the ability of the parties to satisfy, in a
timely manner, the other conditions to the implementation of the
Arrangement; the expected timing for payment of the Option Premium;
the occurrence or waiver of the Triggering Event; the ability of
the Companies to satisfy, in a timely manner, the conditions to
closing following the occurrence or waiver of the Triggering Event;
other expectations and assumptions concerning the Acquisition; and
such risks contained in the management information circulars of
Canopy Growth and Acreage dated May 17,
2019, in Canopy Growth's annual information form dated
June 27, 2018 and in Acreage's annual
information form dated April 24, 2019
and filed with Canadian securities regulators available on Canopy
Growth and Acreage's respective issuer profiles on SEDAR at
www.sedar.com. Readers are cautioned that the foregoing list of
factors is not exhaustive.
In respect of the forward-looking statements and information
concerning the anticipated benefits and completion of the
Acquisition and the anticipated timing for completion of each of
the Arrangement and the Acquisition, the Companies have provided
such statements and information in reliance on certain assumptions
that they believe are reasonable at this time. Although the
Companies believe that the assumptions and factors used in
preparing the forward-looking information or forward-looking
statements in this news release are reasonable, undue reliance
should not be placed on such information and no assurance can be
given that such events will occur in the disclosed time frames or
at all. The forward-looking information and forward-looking
statements included in this news release are made as of the date of
this news release and the Companies do not undertake an obligation
to publicly update such forward-looking information or
forward-looking information to reflect new information, subsequent
events or otherwise unless required by applicable securities
laws.
The Acquisition cannot close until the required regulatory
approval is obtained. There can be no assurance that the
Arrangement or the Acquisition, including the Triggering Event,
will occur, or that it will occur on the terms and conditions
contemplated in this news release. Actual results could differ
materially from those currently anticipated due to a number of
factors and risks. Investors are cautioned that, except as
disclosed in the management information circulars of Canopy Growth
and Acreage dated May 17, 2019, any
information released or received with respect to the Arrangement or
the Acquisition may not be accurate or complete and should not be
relied upon.
The Canadian Securities Exchange has not reviewed, approved
or disapproved the content of this news release.
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SOURCE Canopy Growth Corporation