April 22, 2019

Canadian firm to buy Botanist parent upon U.S. pot legalization

Photo | Zachary Comeau
The Botanist General Manager Chris Tolford and Acreage Holdings' Chief Marketing Office Harris Damashek at the company's Worcester dispensary.

If the production and sale of cannabis becomes legal federally, Central Mass. marijuana retailer The Botanist will become the brand of a large Canadian firm.

Acreage Holdings, the New-York based parent company of The Botanist, announced last week it has reached an agreement on a sale of up to $3.4 billion to Ontario-based Canopy Growth Corp.

The companies jointly announced the deal, which includes the right to acquire 100% of Acreage and the requirement to do so if or when cannabis becomes legal federally. For the past five years, a majority of Americans have said cannabis should be legalized, according to the Pew Research Center. In 2018, 62% supported legalization.

The deal includes an immediate $300-million payment to Acreage shareholders upon the approval of each company's shareholders and the rest of the money would come once federal legislation comes.

The potential $3.4-billion price tag represents a 41.7% premium over Acreage's share price.

In Massachusetts, Acreage, which operates under the brand name The Botanist, is based in Worcester County with a medical dispensary in Worcester and two others planned in Shrewsbury and Leominster and production facilities in Sterling.

Acreage, listed on the Canadian Stock Exchange with a market cap above $2.5 billion, is one of the largest U.S. cannabis operators with high-profile politicians sitting on the board, including former Massachusetts governor and Republican presidential hopeful Bill Weld and former U.S. Speaker of the House John Boehner.

In December, U.S. Congress legalized hemp, the non-psychoactive cousin of marijuana and several U.S. lawmakers have proposed bills to either legalize or allow states to make their own decisions without the fear of penalty from the federal government.

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