One of the most unique transactions in the public marijuana industry may be misunderstood by market participants, according to one of the people behind the deal.
The leading executives of Canopy Growth (NYSE:CGC,TSX:WEED) and Acreage Holdings (CSE:ACGR.U,OTCQX:ACRGF) held the stage together at the kickoff of the MJBizConINT’L event in Toronto to discuss the state of consolidation in the cannabis space.
Kevin Murphy, CEO of Acreage, told the audience at the show on Thursday (September 5) that Canopy has an obligation to its deal with the multi-state operator.
“Canopy has an obligation to exercise that option, and given the disparity between where parity is today and where our stock trades, clearly it’s either misunderstood or people believe that option is not a two way mandate,” Murphy said during the panel.
In April, the two marijuana firms announced an acquisition plan by way of a transaction valued at US$3.4 billion. Part of the deal states that Canopy Growth will complete the transaction should cannabis become legal in the US.
However, the companies have hinted that the passing of the STATES Act, a policy that has opened the doors for states to regulate their cannabis programs without federal interference, could also trigger the acquisition.
Mark Zekulin, CEO of Canopy Growth, added that if an investor today believes the triggering action for the deal — the legalization of cannabis in the US — is set to take place, investing in his firm represents future exposure to the entire US market.
Canopy Growth has made moves to the US space with investment in hemp development.
Asked about the size of the cannabis infused beverage market in the US, $ACRG CEO Kevin Murphy says there’s potential to replace beer or wine if companies can attach these new drinks to social settings. #MJBizConINTL
— Cannabis News | INN (@INN_Cannabis) September 5, 2019
“Canopy has an option to buy Acreage, but it’s actually I would call it a forced option,” said Zekulin. “If you believe the triggering event will occur … in the next six, seven years, then it’s not a question of Canopy might exercise its option — Canopy will exercise its option, Canopy has to exercise its option.”
After the dismissal of Bruce Linton, former co-CEO and spokesperson for Canopy Growth, Zekulin assumed the role of CEO. He is set to hold his position until the cannabis firm finds a new leader.
The deal has also opened the door for Acreage to use brands and intellectual property from Canopy Growth. Zekulin said the partnership and brand sharing goes “much deeper” than just a store name.
The duo briefly talked about the lessons shared between market players from the US and Canadian markets. Murphy said the US’ biggest export for this industry will be brands and brand appeal.
He hinted that there is a chance there will be recognizable brand development in the US that later appears in the Canadian market.
Don’t forget to follow us @INN_Cannabis for real-time news updates!
Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Acreage Holdings is a client of the Investing News Network. This article is not paid-for content.
Company is strategically building a diverse edibles portfolio with taste-forward and effects-driven products to cater to market and consumer needs
Cresco Labs (CSE:CL) (OTCQX:CRLBF) (“Cresco Labs” or “the Company”), a vertically integrated multistate operator and the number one U.S. wholesaler of branded cannabis products, today announced the launch of Wonder Wellness (“Wonder”) Gummies and availability in Illinois. The new low-dose edibles are enhanced with botanicals to complement the overall cannabis experience, and their simple packaging communicates desired effects so wellness-minded category newcomers can consume with confidence to add cannabis as a part of their daily lifestyles.
INDVR Brands Inc. Signs Letter of Intent with BevCanna to Introduce Honu’s THC Infused Products to Canadian Consumers
INDVR Brands Inc. (CSE: IDVR) (the “Company” or “INDVR Brands” or “INDVR”), a premier cannabis brand, consolidator and edibles retailer, proudly announces it has signed a Letter of Intent (“LOI”) with BevCanna Enterprises Inc. (“BevCanna”) to produce and distribute certain HONU THC infused and award-winning edible products to retail locations across Canada. The new partnership marks INDVR’s first introduction to the Canadian cannabis market and its first international expansion.
“With the THC infused product segment making up a growing percentage of the cannabis consumed in Canada, now is the ideal time to introduce our HONU brand into an edibles market estimated at approximately $1.6 billion annually,” said Joshua Mann, INDVR’s CEO. “Our dedication to product quality and consistency is our defining factor in producing some of the most trusted products in Washington and Oregon states, and we are excited to start building the same brand-loyal following across Canada.”
Reports Eighth Consecutive Quarter of Positive Adjusted EBITDA and Positive Adjusted EBITDA from Cannabis Business
Aphria Inc. (” Aphria ,” ” we ,” or the ” Company “) (TSX: APHA) (NASDAQ: APHA), a leading global cannabis-lifestyle consumer packaged goods company inspiring and empowering the worldwide community to live their very best life, today reported its financial results for the third quarter and nine months ended February 28, 2021 . All amounts are expressed in Canadian dollars, unless otherwise noted and except for per gram, kilogram, kilogram equivalents, and per share amounts.
Thoughtful Brands, Inc. (CSE:TBI)(FWB:1WZ1)(OTCQB:PEMTF) (the “Company” or “Thoughtful Brands“), an eCommerce technology company that researches, develops, markets, and distributes natural health products through various brands in North America and Europe, announces that it intends to consolidate its issued and outstanding common shares (“Shares”) at a ratio of ten (10) pre-consolidated Shares to one (1) post-consolidation Share (the “Consolidation
The Company currently has 389,274,701 Shares issued and outstanding. Following the Consolidation there will be approximately 38,927,470 Shares issued and outstanding. No fractional Shares will be issued and any fractions of a Share will be rounded down to the nearest whole number of Shares. The exercise or conversion price and the number of Shares issuable under any of the Company’s outstanding convertible securities will be proportionately adjusted upon Consolidation.
In the evolving rush of mergers and acquisitions (M&A) in the Canadian cannabis market, Canopy Growth (NASDAQ:CGC,TSX:WEED) announced it will acquire The Supreme Cannabis Company (TSX:FIRE,OTCQX:SPRWF) in a deal worth approximately C$435 million.
Meanwhile, a cannabis operator in the US confirmed this week that it will receive a financial boost from a partner to solidify its position in the burgeoning Pennsylvania state market.