Canopy Growth Corp. and Acreage Holdings Inc. agreed to alter the terms of their merger agreement, joining a growing list of cannabis deals to be overhauled as the industry grapples with slowing growth and legal roadblocks.
Canopy will provide Acreage shareholders with an up-front cash payment of US$37.5 million under the revised terms, adding to the previously announced US$300 million payment. Canopy will also loan Acreage up to US$100 million to fund its U.S. hemp division and create a new class of shares, the companies said Thursday in a statement.
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The re-engineering of an already complex deal comes as the industry struggles to keep pace with growth expectations and overcome the added challenge of pandemic-related economic uncertainty. Companies have sought to consolidate to survive as banks and institutional investors remain unable to throw U.S. companies a lifeline because their product isn’t federally legal.