Two months on from the affirmation of Canadian licensed producer Cover Development’s (TSX:WEED; NYSE:CGC) rumored bid to accumulate US-based firm Acreage Holdings (CSE: ACRG.U; OTC: ACRGF), the deal continues to be managing to make headlines throughout the North American cannabis business.
The phrases of that proposed acquisition embody one key sticking level that has stood out for buyers and analysts alike – the deal hinges on cannabis both changing into totally legalized on the federal degree within the US, or at the least being eliminated as a Schedule I managed substance by means of the Managed Substances Act.
Whereas Illinois simply grew to become the 11th state to legalize leisure utilization – along with the 33 states that already permit medical use – cannabis stays unlawful on the federal degree and can possible stay so for at the least one other yr because the US Presidential election cycle begins in earnest.
By coming into an settlement to accumulate Acreage now, effectively forward of any severe makes an attempt at nationwide US legalization, Cover is hoping to capitalize on the early mover benefit inherent to Canadian corporations which have been up and working for near a yr for the reason that Hashish Act went into impact.
Along with that main US regulatory hurdle, the deal should nonetheless be authorised by the shareholders of each corporations.
With the looming resolution deadline of Monday, June 17 rapidly approaching, Acreage and Cover launched statements in the present day urging shareholders to vote in favor of the acquisition deal by means of a marketing campaign titled “1 + 1 = international management.”
Cover and Acreage issued this joint assertion to shareholders in regards to the upcoming vote:
Acreage shareholders are anticipated to profit from accelerated growth, improved scale, and a stronger market place within the US, powered by the IP and model rights of the world’s main cannabis firm. For Cover Development shareholders, the transaction represents a transparent path for Cover to enter the US cannabis market, when federally-permissible.
The 2 corporations additional said that if the deal is authorised, Acreage shareholders will obtain a money fee of between $2.51 – US$2.63 per subordinate voting share held.
Acreage CEO Kevin Murphy and Cover Development CEO Bruce Linton launched a collection of video clips answering shareholder questions in regards to the acquisition, which may be discovered over right here.