Canopy Growth (TSX:WEED) (NYSE:CGC) today announced it'll be acquiring Acreage Holdings (OTCQX:ACRGF), a New York-based cannabis company, for just over $3.4 billion. Considering Acreage is a massively large US multi-state operator, cannabis investors seem pleased with the news. WEED stock is currently up nearly 10%.
Canopy Growth News Sends WEED Stock Higher
Announced today, Canopy Growth and Acreage Holdings reached a purchase deal. It grants Canopy the right to purchase all of Acreage's stock, and the agreement will go into effect after the United States legalizes cannabis. Until then, the two companies will work independently.
While questions remain on legalization, Canopy Growth is still optimistic about the deal, particularly about the future for its shareholders, as well as Acreage's. “By combining Acreage’s management team, licenses and assets with Canopy Growth’s intellectual property and brands," said Bruce Linton, co-CEO of Canopy Growth, "there will be tremendous value creation for both companies’ shareholders.”
Perhaps that's why WEED stock jumped as much as it has today. Initially, after the news was released, WEED stock jumped more than 8%, according to CNBC. According to Yahoo Finance, as of 1:51 PM, WEED stock is trading at $60.73, which puts it up 6.34%.
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Not Just Canopy Growth
Acreage Holdings is also benefitting from the news, with ACRGF stock up nearly 2.95%, as of 1:53 PM.
Under the terms of the deal, Acreage Holdings will now have access to Canopy Growth's vault of brands, which includes Tweed, according to sources.
Potential Issues
As this deal plays out (and as legalization does the same), we may see a few issues arise. Specifically, issues with the NASDAQ and TSX, because these exchanges might not be "prepared to allow this listing."
Takeaway
Any thoughts on Canopy Growth acquiring Acreage Holdings? Do you see the NASDAQ and TSX having issues with the deal? Let us know what you think about WEED stock!
Featured image: Canva
