This has been quietly going on for a while in the background. It is worth keeping an eye on.
The Press Release
NEW YORK, March 21, 2023 (GLOBE NEWSWIRE) — Acreage Holdings, Inc. (“Acreage” or the “Company”) (CSE: ACRG.A.U, ACRG.B.U), (OTCQX: ACRHF, ACRDF), is pleased to announce that it has obtained a final order from the Supreme Court of British Columbia approving the previously announced arrangement (the “Floating Share Arrangement”) under section 288 of the Business Corporations Act (British Columbia) (the “BCBCA”) involving Canopy Growth Corporation (“Canopy”) and Canopy USA, LLC (“Canopy USA”). The implementation of the Floating Share Arrangement is subject to the satisfaction or waiver of all other conditions set out in the arrangement agreement dated October 24, 2022, as amended on March 17, 2023, among the Company, Canopy and Canopy USA (the “Floating Share Arrangement Agreement”). Pursuant to the Floating Share Arrangement, Canopy USA will acquire all of the issued and outstanding Class D subordinate voting shares of Acreage (the “Floating Shares”) on the basis of 0.45 of a common share of Canopy (each whole share, a “Canopy Share”) for each Floating Share held at the time of the acquisition of the Floating Shares.
In accordance with the terms of the Floating Share Arrangement Agreement, Canopy has agreed, subject to the terms and conditions set forth therein, to exercise its option pursuant to the arrangement agreement (the “Existing Arrangement Agreement”) between Canopy and Acreage dated April 18, 2019, as amended (the “Fixed Option”) to acquire Acreage’s outstanding Class E subordinate voting shares (the “Fixed Shares”), representing approximately 70% of the total shares of Acreage as at the date hereof, at a fixed exchange ratio of 0.3048 of a Canopy Share for each Fixed Share held, such exercise to occur no later than five business days following the satisfaction of all required conditions. Upon completion of: (i) the acquisition of the Floating Shares pursuant to the Floating Share Arrangement; and (ii) the acquisition of the Fixed Shares pursuant to the arrangement under section 288 of the BCBCA on the terms and conditions set out in the Existing Arrangement Agreement (the “Existing Arrangement”), Canopy USA will own 100% of the issued and outstanding shares in the capital of Acreage.
As previously announced, Acreage received the required approval of the holders of Floating Shares (the “Floating Shareholders”) in connection with the Floating Share Arrangement at its special meeting of Floating Shareholders held on March 15, 2023. Upon the satisfaction or waiver of all other conditions set out in the Floating Share Arrangement Agreement, which the parties continue to work towards, the parties will complete the Floating Share Arrangement.
On March 17, 2023, Acreage, Canopy and Canopy USA entered into an amendment to the Floating Share Arrangement Agreement to extend the Exercise Outside Date (as defined in the Floating Share Arrangement Agreement) from March 31, 2023 to May 31, 2023, or such later date as may be agreed to in writing by Acreage, Canopy and Canopy USA.