Announcement • Dec 10
Canopy USA, LLC completed the acquisition of Acreage Holdings, Inc. (CNSX:ACRG.A.U). Canopy USA, LLC exercised its option to acquire Acreage Holdings, Inc. (CNSX:ACRG.A.U) for $32.6 million on June 3, 2024. The consideration consists of common equity of Canopy Growth at a ratio of 0.03048 per outstanding Class E subordinate voting shares of Acreage Holdings, Inc. and 0.045 of a common share of Canopy Growth for each class D Floating Share held. As per filling of November 25, 2024, as a result of dilution in respect of the Offering completed by the Company in June 2024, the Company expects that the Exchange Ratio relating to the Fixed Shares will result in fewer common shares (the “Canopy Shares”) of Canopy Growth Corporation. As a result of the material impact of the Offering it is anticipated that the current holders of Fixed Shares will receive zero value upon closing of the Acquisitions. Closing of the acquisition of Acreage remains subject to all of the closing conditions set forth in the Acreage Fixed Share Arrangement Agreement. As of November 25, 2024, the transaction is expected to close in mid-December, 2024, subject to the satisfaction or waiver of closing conditions, including, but not limited to, receipt by Acreage, Canopy and Canopy USA of required regulatory approvals. As of December 2, 2024, the transaction is expected to close on or around December 9, 2024. Odyssey Trust Company acted as transfer agent to Canopy USA, LLC.
Canopy USA, LLC completed the acquisition of Acreage Holdings, Inc. (CNSX:ACRG.A.U) on December 9, 2024. In aggregate, Canopy Growth issued approximately 5.89 million Canopy Shares (with a value equal to approximately $21.2 million) to former Acreage shareholders, Cassels Brock & Blackwell LLP and Paul Hastings LLP acted as Canadian and U.S. legal counsel, respectively, to Canopy Growth. Greenhill & Co.Canada Ltd. acted as financial advisors to Canopy Growth. DLA Piper (Canada) LLP and Cozen O'Connor acted as Canadian and U.S. legal counsel, respectively, to Acreage. Canaccord Genuity Corp. and Eight Capital acted as financial advisors to Acreage. New Risk • Nov 26
New major risk - Market cap size The company's market capitalization is less than US$10m. Market cap: US$6.10m This is considered a major risk. Companies with a small market capitalization are most likely businesses that have not yet released a product to market or are simply a very small company without a wide reach. Either way, risk is elevated with these companies because there is a chance the product may not come to fruition or the company's addressable market or demand may not be as large as expected. In addition, if the company's size is the main factor, it is less likely to have many investors and analysts following it and scrutinizing its performance and outlook. Currently, the following risks have been identified for the company: Major Risks Less than 1 year of cash runway based on free cash flow trend (-US$30m free cash flow). Share price has been highly volatile over the past 3 months (48% average weekly change). Negative equity (-US$126m). Market cap is less than US$10m (US$6.10m market cap). Reported Earnings • Nov 17
Third quarter 2024 earnings released: US$0.16 loss per share (vs US$0.067 loss in 3Q 2023) Third quarter 2024 results: US$0.16 loss per share (further deteriorated from US$0.067 loss in 3Q 2023). Revenue: US$39.6m (down 30% from 3Q 2023). Net loss: US$19.5m (loss widened 156% from 3Q 2023). Over the last 3 years on average, earnings per share has fallen by 8% per year but the company’s share price has fallen by 55% per year, which means it is performing significantly worse than earnings. 
