Acreage Holdings (CSE:ACRG.U, OTCQX:ACRGF,FWB:0VZ) was featured in an article by Bloomberg about Canopy Growth’s (TSX:WEED,NYSE:CGC) planned acquisition of the company. According to the article, one of Acreage’s shareholders has come out in favor of its sale to the Canadian cannabis company. Cresco Capital Partners LLC has been an Acreage shareholder since 2015 and believes that the company’s association with Canopy will give it a capital boost before the deal closes.
“I think at the end of the day people will take a step back and realize that the positives far outweigh the negatives on this,” said Cresco Capital Founder and Managing Partner Matt Hawkins.
Hawkins sent a letter of support to his fund’s investors on Thursday arguing that the consolidation would benefit both Acreage and the cannabis industry as a whole. He believes that despite the difference between the offer price and Acreage’s current share price, shareholders will approve the deal at the vote on June 19. The offer requires the backing of two-thirds of Acreage’s shareholders.
As part of the deal, Acreage investors will receive $300 million in cash up front, with the remainder to be paid in Canopy shares if US laws change. Acreage is allowed to issue up to 58 million subordinate voting shares before US legalization, and those shares will become Canopy stock if the deal is completed giving Acreage “a very attractive piece of paper to be utilizing in transactions,” according to Hawkins. In Canopy’s filing on Thursday, the company stated that it could waive the US legalization contingency if the New York Stock Exchange or the Toronto Stock Exchange change their listing rules.
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