Canopy Growth Corporation ( CGC ) announced on Tuesday today that the option to acquire all of the issued and outstanding Class E subordinate voting shares of Acreage Holdings, Inc. ( ACRHF ) (CSE:ACRG, ACRG.B.U))) )), has been exercised.

What Happened

The latest move is by the terms of the arrangement agreement dated April 18, 2019, as amended, between Canopy Growth ( CGC ) and Acreage.

In connection with the arrangement agreement dated October 24, 2022, by and among Canopy Growth ( CGC ), Canopy USA, LLC and Acreage, as amended, in respect of the Class D subordinate voting shares of Acreage, on closing, Canopy USA will acquire all of the fixed shares and floating shares and Acreage will become a wholly-owned subsidiary of Canopy USA.

Debt Acquisition

Additionally, the Canadian cannabis giant said on Tuesday that it exercised its option, in part, to acquire certain outstanding debt of Acreage. That's in connection with the option agreement dated November 15, 2022, among a wholly-owned subsidiary of Canopy Growth ( CGC ) and the lenders party to Acreage’s credit agreement dated December 2021, as amended on October 24, 2022 and April 28, 2023.

See also: Acreage’s Q1 Revenue Slips 19% YoY But CEO Foresees ‘Significant Growth Opportunities’ As Canopy Growth Strategy Moves Forward

Dennis Curran, Acreage’s CEO, praised the move.

"This is a transformative moment which reflects the determination of our partners and team to deliver a clear path for growth and look forward to this next step in Acreage's journey as part of the Canopy USA ecosystem," Curran said. "The debt restructuring and option exercise to commence Canopy USA's acquisition of the Company, combined with our operational restructuring and our focus on reduced costs, should enable us to reach our potential and we are especially excited about Acreage's opportunities in Ohio, Pennsylvania, New York, and New Jersey."

Why It Matters

Canopy USA has completed the acquisition of 100% of two of the three companies in the Wana Brands portfolio, being all of the equity interests of Wana Wellness, LLC and The CIMA Group, LLC. The company also acquired roughly 77% of the shares of Lemurian, Inc. on May 31, 2024. Wana Wellness, CIMA, and Jetty are now subsidiaries of Canopy USA.

Now read: Canopy Growth Expands U.S. Reach By Acquiring These Two Key Cannabis Brands

“These are major steps forward and consistent with the strategy outlined by Canopy Growth ( CGC ) to allow our shareholders to benefit from our ownership of non-voting shares in Canopy USA, and we’re excited to see this advancing as more of Canopy USA’s priority markets come online for adult use across the Midwest and Northeast,” David Klein, Canopy Growth's ( CGC ) CEO and member of the board of managers of Canopy USA, said.

Learn more about leading cannabis companies and stocks, at the Benzinga Cannabis Market Spotlight in New Jersey on June 17th! Grow your business, raise money, and capitalize on the booming NJ recreational market. Don't miss this must-attend event in New Brunswick. Secure your tickets now. Very few spots are left. Use the code “JAVIER20” for 20% off!

What's Next

Canopy USA’s acquisition of Mountain High Products, LLC is still subject to regulatory approval. It is expected to close in the first half of fiscal 2025.

In addition, the closing of the acquisition of Acreage remains subject to all of the closing conditions.

CGC Price Action

Canopy Growth's ( CGC ) shares traded 1.21% lower at $7.92 per share during the pre-market session on Tuesday morning.

Now read: Piper Sandler Maintains Underweight On Canopy Growth Stock, Calls Cannabis Rescheduling ‘Largely Symbolic’