Canadian cannabis company Canopy Growth Corp. (NAS:CGC) (TSE:CA:WEED) said Thursday it has agreed to amend its plan of arrangement with Acreage Holdings Inc. to provide capital to the New York-based Acreage to fund hemp operations. The companies original agreement, announced in April of 2019, allowed Canopy to gain full control of Acreage as soon as cannabis restrictions in the U.S. are lifted. The amended arrangement will provide Acreage shareholders and certain holders of convertible bonds with an upfront payment of $37.5 million, or 30 cents per share. It will also give Acreage shareholders the ability to participate in the upside potential upon the triggering event described above. The amended arrangement will create two classes of Acreage shares, including a new floating share that is not tied to a fixed exchange ratio. "The United States is going to be a core market for Canopy Growth and this new agreement solidifies our path forward with Acreage," said David Klein, Chief Executive Officer of Canopy Growth in a statement. Canopy shares were up 1.1% premarket, but have fallen 21% in the year to date, while the Cannabis ETF (PSE:THCX) has fallen 21% and the S&P 500 (S&P:SPX) has fallen 6%.
June 25, 2020, 7:18 a.m. EDT