Acreage shareholders will get an immediate payment of $2.55 per share if the deal proceeds, which depends on U.S. federal cannabis legislation.
The acquisition of a U.S. firm by the Smiths Falls, Ont.-based cannabis giant would represent the a major milestone for the industry.
Acreage, which is listed on the Canadian Securities Exchange, is among the largest U.S. multi-state operators, with licenses or agreements in place with license holders to operate in 19 states.
The company has a market capitalization of $2.47 billion.
The TMX Group Ltd., which operates the Toronto Stock Exchange, has restrictions on listed companies investing in the U.S. pot industry, as the drug remains illegal at the federal level in that country.
TMX Group said in Oct. 2017 that issuers listed on its exchanges must comply with laws and regulations in the jurisdictions in which they operate.
The recent passage of the U.S. Farm Bill loosened restriction on CBD, a non-psychoactive cannabis compound known for its pain relief and anti-inflammatory properties.
Canopy has announced plans to invest up to US$150 million to process and produce hemp in New York after securing a license from the state’s government in January. Co-CEO Bruce Linton told Yahoo Finance in February that Canopy could spend as much as $500 million on hemp production across two or three U.S. states.
"Anything that would allow at a state level the activities that currently occur in the state not to be offside federally, and as a result enable parties like NYSE to see it such that our listing would be maintained, immediately mean that we are in,” Linton said told analysts on a conference call following the release of third-quarter financial results.
Canopy is also listed on the New York Stock Exchange under the ticker CGC. It’s shares were up around 8 per cent at the opening bell.
Acreage holdings was up around 11 per cent.