In April 2019, Canadian giant Canopy Growth said it would acquire MSO Acreage Holdings for $3.4B, once U.S. law permitted. The deal, touted as the industry’s biggest ever, has now been revised sharply downward to value Acreage at about $900M, according to Cowen analyst Vivien Azer.

  • A press release attributed the change to difficult economic conditions and volatile markets.
  • Depending on specifics, the deal does not necessarily require full federal U.S. legalization to close. Banking reform could be enough.
  • Canopy, which recently announced a $1B+ quarterly loss, says  layoffs, drinks, the U.S. market and CBD all factor into its turnaround plan.
  • As part of the new deal, Acreage CEO Kevin Murphy will step down.
  • Attorney David B. Feder looked at Acreage’s delayed Q1 financials, “They’re not pretty.”
  • Here’s my interview with Murphy from a year ago, when he was riding high.

One figure who has been notably silent is former U.S. Speaker of the House John Boehner (R) who joined the Acreage board in April 2018. Though he had never used cannabis, he stood to make $20M if the original deal went through. Acreage stock is way down since then.
Washington Post, N.Y. Times

WeedWeek Canada editor Jesse Staniforth and I discussed the Canopy/Acreage deal on this week’s edition of the WeedWeek News Brief.

Quick Hit

  1. MSO iAnthus received a demand for debt repayment.