Acreage Announces Sale of Maryland Dispensary

NEW YORK, Aug. 12, 2020 (GLOBE NEWSWIRE) -- Acreage Holdings, Inc. (“Acreage” or the “Company”) (CSE: ACRG.U) (OTCQX: ACRGF) (FSE: 0VZ), a vertically integrated, multi-state operator of cannabis licenses and assets in the U.S., today announced it has entered into a definitive agreement with an undisclosed buyer (the “Buyer”), pursuant to which the Buyer, when permitted by state law, will purchase all of the issued and outstanding membership interests of Maryland Medicinal Research & Caring, LLC (“MMRC”). MMRC is licensed to operate a medical cannabis dispensary in Baltimore, Maryland. 

The terms of the deal were not disclosed.  Due to regulatory restrictions regarding license transfers, the Buyer, upon approval by the Maryland Medical Cannabis Commission, will enter into a managed services agreement with MMRC until the requisite time has elapsed before Acreage and the Buyer can close the transaction under the definitive agreement.  Closing of the transaction is contingent upon regulatory approvals.

“The sale of our Maryland dispensary is another step forward in our refocused strategy to accelerate our pathway to profitability,” said Bill Van Faasen, Interim Chief Executive Officer of Acreage. “It follows our divestiture in North Dakota, plus other cost-cutting measures completed earlier this year.  We are moving forward with our refocused plan as quickly as possible and we will continue to update shareholders on our progress as new events transpire.”

ABOUT ACREAGE

Headquartered in New York City, Acreage is a vertically integrated, multi-state operator of cannabis licenses and assets in the U.S. Acreage is dedicated to building and scaling operations to create a seamless, consumer-focused branded cannabis experience. Acreage debuted its national retail store brand, The Botanist, in 2018 and its award-winning consumer brands, The Botanist and Live Resin Project in 2019.

On June 27, 2019, Acreage implemented an arrangement under section 288 of the Business Corporations Act (British Columbia) (the “Current Arrangement”) with Canopy Growth Corporation (“Canopy Growth”) pursuant to an arrangement agreement dated April 18, 2019, as amended on May 15, 2019 (the “Arrangement Agreement”).  On June 24, 2020, Canopy Growth and Acreage entered into an agreement (the “Proposal Agreement”) proposing to amend certain terms of the Current Arrangement and the Arrangement Agreement (collectively, the “New Arrangement”).  Pursuant to the Current Arrangement, upon the occurrence of changes to federal laws in the United States to permit the general cultivation, distribution and possession of marijuana or to remove the regulation of such activities from the federal laws of the United States (the “Triggering Event”) (or waiver of the Triggering Event by Canopy Growth), Canopy Growth will, subject to the satisfaction or waiver of certain closing conditions, acquire (the “Acquisition”) each of Acreage’s class A subordinate voting shares (the “Subordinate Voting Shares”) (following the automatic conversion of the Class B proportionate voting shares (“Proportionate Voting Shares”) and Class C multiple voting shares (the “Multiple Voting Shares”) into Subordinate Voting Shares) on the basis of 0.5818 of a common share of Canopy Growth (each whole share, a “Canopy Growth Share”) per Subordinate Voting Share (subject to adjustment in accordance with the terms of the Arrangement Agreement), until such time as amended in accordance with the New Arrangement.