On April 18, 2019, Canopy Growth Corporation and Acreage Holdings Inc., a U.S. multi-state cannabis operator, announced that they entered into an arrangement agreement whereby Canopy Growth will have the right to acquire 100 percent of the shares of Acreage at such time as cannabis production and sale becomes federally legal in the United States, subject to obtaining Canopy shareholder approval, Acreage shareholder approval and court approval.
Under the terms of the agreement, following the approval of Canopy and Acreage shareholders and court approval, Canopy will make an aggregate payment of US$300 million based on the currently outstanding subordinate voting shares of Acreage and conversion of certain convertible securities. Upon exercise of the right, holders of subordinate voting shares of Acreage will receive 0.5818 of a common share of Canopy for each Acreage subordinate voting share.
In connection with the arrangement, Constellation agreed to waive its veto rights to the transaction subject to certain proposed modifications to its warrants exercisable for Canopy shares and other rights.
Osler, Hoskin & Harcourt LLP acted for Constellation Brands with a team consisting of Manny Pressman, James Brown, Brett Anderson (Corporate/M&A), Mark Austin and Marty Putyra (Heath).