Cannabis News for Florda
Acreage Holdings, Inc. (“Acreage”) (CSE: ACRG.A.U, ACRG.B.U), (OTC: ACRHF, ACRDF) a multi-state operator of cannabis ‎cultivation and retailing facilities in the U.S., announced today... Acreage Holdings Announces Sale of Notes

Acreage Holdings, Inc. (“Acreage”) (CSE: ACRG.A.U, ACRG.B.U), (OTC: ACRHF, ACRDF) a multi-state operator of cannabis ‎cultivation and retailing facilities in the U.S., announced today it has completed the sale of US$28.0 million in promissory notes receivable (the “Notes”) that it received as consideration for the previously announced sale of its Acreage Florida subsidiary to Red White and Bloom Brands, Inc. (CSE: RWB) (OTCQX: RWBYF).

The Notes, which are due from Red White and Bloom Brands, Inc., were sold to Viridescent Realty Trust, Inc. (“Viridescent”) for total cash proceeds of US$26.0 million. This represents the upper range of the estimated fair market value of the Notes as determined by an independent financial advisor retained by Acreage to consider the fair market value of the Notes. No additional fees or commission were paid related to the sale of the Notes.

US$21.0 million of the proceeds from the sale of the Notes will be used to repay IP Investment Company, LLC (“IP Investment”) as part of a credit agreement previously announced on February 7, 2020. This amount was borrowed from IP Investment in order to post collateral in a Credit Agreement with SAFB Harmony LP, as agent for certain lenders, also announced on February 7, 2020 (the “SAFB Credit Agreement”). The collateral, which is held in a restricted account, will be released to repay the SAFB Credit Agreement and also result in the return of approximately $1.0 million to Acreage.

“The sale of the promissory notes that we received as consideration for the sale of our Florida operations, as well as the use of these proceeds to extinguish other debts of the Company, represent an important next step in strengthening our balance sheet,” said Steve Goertz, Chief Financial Officer of Acreage. “As we have previously communicated, Acreage remains focused on our three key strategic objectives – driving profitability, strengthening our balance sheet, and accelerating our growth in our core markets.”

Viridescent is an entity controlled by Kevin Murphy, the Chairman of the Board of Directors of Acreage. Because of Mr. Murphy’s interest in Viridescent, the sale of the Notes to Viridescent constitutes a “related party transaction” within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Company has relied on the exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 at Sections 5.5(a) and 5.7(1)(a) of MI 61-101 in respect of such sale on the basis that neither the fair market value (as determined under MI 61-101) of the subject matter of, nor the fair market value of the consideration for, the transaction exceeded 25% of the Company’s market capitalization (as determined under MI 61-101). Further details will be included in a material change report to be filed by the Company. The material change report will be filed within 10 days of the date sale of the Notes.

ABOUT ACREAGE HOLDINGS, INC.

With its principal address in New York City, Acreage is a multi-state operator of cannabis ‎cultivation and retailing facilities in the U.S., including the company’s national retail store ‎brand, The Botanist. Acreage’s wide range of national and regionally available cannabis products include the award-winning The Botanist brand, the highly recognizable Tweed brand, the Prime medical brand in Pennsylvania, the Innocent edibles brand in Illinois and others. Acreage also owns Universal Hemp, LLC, a hemp subsidiary dedicated to the distribution, marketing and sale of CBD products throughout the U.S. Since its founding in 2011, Acreage has focused on building and scaling operations to create a ‎seamless, consumer-focused, branded experience. More information is available at www.acreageholdings.com.

On June 27, 2019, Acreage implemented an arrangement under section 288 of the Business Corporations ‎Act (British Columbia) with Canopy Growth Corporation (“Canopy Growth”), which was subsequently amended on September 23, 2020 (the “Amended Arrangement”)‎. Pursuant to the Amended Arrangement, ‎upon ‎the occurrence (or waiver by Canopy Growth) of changes in federal laws in the United States to permit the general cultivation, distribution and possession of marijuana (as defined in the relevant legislation) or to remove the regulation of such activities from the federal laws of the United States (the “Triggering Event”), Canopy Growth will, subject to the ‎satisfaction or waiver of certain closing conditions, acquire ‎all of the issued and outstanding Class E subordinate voting shares (the “Fixed Shares”) on the basis of 0.3048 of a Canopy Growth share per ‎Fixed Share (following the automatic conversion of the Class F multiple voting shares and subject to adjustment ‎in accordance with the terms of the arrangement agreement entered into between Acreage and Canopy Growth on April 18, 2019, as amended on May 15, 2019 and on September 23, 2020).

In addition, Canopy Growth holds an option, exercisable at the discretion of Canopy Growth, to acquire all of the ‎issued and outstanding Class D subordinate voting shares (the “Floating Shares”) at the time that Canopy Growth acquires the Fixed Shares, for ‎cash or Canopy Growth shares, as Canopy Growth may determine, at a price per Floating Share based ‎upon the 30-day volume-weighted average trading price of the Floating Shares on the CSE relative to the trading price of the Canopy Growth shares at the time of the ‎occurrence or waiver of the Triggering Event, subject to a minimum price of US$6.41 per Floating Share.

For more information about the Amended Arrangement please see the Acreage proxy statement and management information circular dated August 17, 2020 (the “Circular”) and the respective ‎information circulars of each of Acreage and Canopy Growth dated May 17, 2019, which are available on ‎Acreage’s and Canopy Growth’s respective profiles on SEDAR at www.sedar.com and filed with the SEC on the EDGAR website at www.sec.gov. For additional information regarding ‎Canopy Growth, please see Canopy Growth’s profile on SEDAR at www.sedar.com.

No comments so far.

Be first to leave comment below.

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.