Acreage Nearing ‘Head-Turner’ Acquisitions Post Canopy, CEO Says

(Bloomberg) -- Acreage Holdings Inc. has some “head-turner” acquisitions in the works now that its planned sale to pot giant Canopy Growth Corp. has been sealed, according to the New York-based company’s chief executive officer.

“There are going to be some really exciting ones, I think some head-turners, some people are going to be like, ‘Ooh, wow, that’s amazing,”’ Kevin Murphy said in an interview in San Francisco ahead of a panel discussion at the Players Technology Summit presented by Bloomberg.

The deals could change its scale “quite dramatically over the next month,” Murphy said.

The unusual plan of arrangement between Canopy and Acreage, which closed Thursday, is contingent on cannabis becoming federally permissible in the U.S. For now, Acreage shareholders will receive $2.63 in cash and the company will have access to Canopy’s intellectual property and brands. If the deal closes, investors will receive 0.5818 of a Canopy share for each Acreage share they hold.

The deal is currently worth $26.32 per Acreage share or about $3.1 billion. That’s about $10 above Acreage’s current stock price.

Deep, Broad

Acreage can also issue as many as 63 million shares to do acquisitions, with the targets knowing they’ll eventually end up with Canopy stock if the U.S. changes its federal laws. Acreage filed a base shelf prospectus Monday to offer as much as $800 million in shares, debt or other securities over the next 25 months.

Murphy said he doesn’t plan to dip into the capital short-term. “Frankly we have no determination as to when we’ll raise any additional capital because today we’re not in need of it,” he said.

Acreage also plans to begin selling Canopy’s brands in its 26 U.S. stores soon, “with a more definitive rollout” planned over the next month, said Murphy, who was wearing a T-shirt with Canopy’s Tweed brand logo on it.

Illinois, which became the 11th state to legalize recreational cannabis earlier this week, is one area of focus for Acreage.

“We have designs on going very deep and very broad in that state,” he said.

To contact the reporter on this story: Kristine Owram in Toronto at kowram@bloomberg.net

To contact the editors responsible for this story: Brad Olesen at bolesen3@bloomberg.net, ;David Scanlan at dscanlan@bloomberg.net, Jacqueline Thorpe

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