Canopy Growth gains
Canopy Growth (WEED) was trading about 2% higher in the first half of today after Acreage Holdings (ACRGF) reported that its investors supported Canopy aquiring Acreage. Acreage Holdings was trading about 1.2% higher at around noon today.
In its press release, Acreage Holdings indicated that about 91% of its shareholders eligible to vote on the proposed deal with Canopy Growth “have indicated to Acreage their support for the proposed arrangement with Canopy Growth.”
This acquisition has met with approval from investors and analysts alike. Earlier this month, Jefferies raised its target price on the company to 77 Canadian dollars from 64 Canadian dollars. According to Jefferies, Acreage Holdings will enable Canopy Growth to enter the United States, which has huge potential for cannabis companies.
But not everyone was on board. Acreage Holdings investor Marcato Capital Management opposed the merger, stating that the value at which Canopy Growth will acquire Acreage Holdings represents a significant discount. According to Marcato, Canopy Growth is paying $3.4 billion for something worth $6.9 billion. See Why Acreage Acquisition Looks Valuable for Canopy Growth.
During the day, peer OrganiGram (OGI) gained about 4%, HEXO (HEXO) was up 3.2%, and CannTrust (CTST) was also in the green with a 2.5% gain. In contrast, the sector benchmark Horizons Marijuana Life Sciences ETF (HMMJ) was trading down 0.1%.