Canopy Growth to buy New York cannabis firm Acreage for US$3.4 billion


The deal marks the first cross-border merger of two major cannabis companies. Canopy Growth is the largest cannabis company in the world, and Acreage Holdings—whose board includes former Canadian prime minister Brian Mulroney—is among the largest U.S. pot stock on the Toronto Stock Exchange and has cultivation, processing and sales licences in 19 states.

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Talking point: The merger, if approved, will give Canopy access to the U.S. market, where there’s already a much larger customer base than in Canada. Because it’s not yet federally legal in the States, however, U.S. companies—and Canadian firms with U.S. subsidiaries—face challenges accessing funding. To ensure the sale complies with U.S. federal regulations, Canopy’s ownership stake in Acreage may not become active until the U.S. lifts federal prohibition. When that happens, Canopy will be in a comfortable position to maintain its dominance in the U.S. and Canadian markets as more competition rushes in.