Midas Letter Capital Markets Advisor Steve Misener, CFA, breaks down Canopy Growth Corp’s (TSE:WEED) (NYSE:CGC) (FRA:11L1) planned acquisition of Acreage Holdings Inc (CNSX:ACRG.U) (OTCMKTS:ACRGF). Misener believes the deal represents a win for both companies and suggests that Acreage had to act as liquidity issues and the fact that its stock was trading believe its IPO price meant it would be less than favourable for the company to raise more equity. Acreage is now in 20 states and Misener suggests the buildout of that footprint may have seriously depleted the company’s IPO funds. Misener indicates that the market is not currently pricing in the company’s eventual share price when the sale is finalized because of the unknown timeline of US federal decriminalization. Misener believes this unknown is what is creating the discount between the potential for the Acreage shares when the deal is finalized and current prices. Misener suggests Acreage, which has not released a financial statement since its IPO, now has access to needed capital through Canopy Growth and Constellation Brands. The deal has provided necessary liquidity and access to essential capital. According to Misener, the deal makes Canopy even more attractive to fund managers, as it gives the company a much-needed US footprint. ************************
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