Canopy to buy Acreage and create a North American cannabis giant

Canopy Growth, the Canadian cannabis giant listed on the NYSE and TSX, is reportedly in the process of buying Acreage Holdings Inc, a dispensary operator present in several US states, according to several sources including Bloomberg.

The deal would represent the first cross-border merger of cannabis companies. The announcement could be made official as early as this week, but discussions are still ongoing.

This acquisition would be an important step for Canopy Growth, the world's largest cannabis company, and for the New York-based U.S. group Acreage, which is chaired by former U.S. House Speaker John Boehner and former Canadian Prime Minister Brian Mulroney.

Acreage has been listed on the Canadian Securities Exchange since November 2018 and is now part of the largest U.S.-based cannabis companies. Acreage has licenses or agreements to grow, process and distribute cannabis in 19 states. It also runs a chain of dispensaries called The Botanist.

Canopy shares took 9% in New York yesterday and Acreage, 15% in Toronto.

It's not yet clear how a Canadian company will be able to maintain its listing, at least on the TSX, which prohibits holding assets in countries where cannabis is not federally legal, such as the USA.

Canopy may choose to acquire a stake in Acreage, which will not be activated. that when American federal prohibition will be lifted.

Canopy has been one of Canada's best-performing stocks this year, recording an increase of 56% and a market value of 19.6 billion Canadian dollars (13.3 billion euros).