Canopy Growth’s US ambitions
Canopy Growth (WEED) (CGC) entered into an agreement to acquire Acreage Holdings. The agreement is contingent on the US legalizing marijuana. Acreage Holdings (ACRGF) will accelerate Canopy Growth’s expansion in the US. In Acreage Holdings’ earnings call on May 29, the company said that it’s the largest cannabis company in the US. Acreage Holdings is present in 20 states. The company accounts for almost 81% of the legal cannabis market in the US.
Given the sheer size of the US market compared to Canada, there’s a lot at stake for Canopy Growth. Companies are starting to do the groundwork well in advance. According to Acreage Holdings, the addressable market in the US is estimated to be ~$17 billion by 2022.
Acreage Holdings is aiming big
The cannabis industry will likely be dominated by acquiring cannabis extraction and related intellectual property. Cannabis companies expect to reach the width and depth of the potential market for cannabis products with more mainstream entry.
Last year, Acreage Holdings acquired Form Factory, which will likely play a big part in reaching the width and depth of the potential cannabis market in the US.
In the press release during the Form Factory acquisition, Kevin Murphy, Acreage Holdings’ founder, chairman, and CEO, said, “Creating a wide range of products that meet the diversified tastes of consumers and owning the national manufacturing and distribution platform to ensure their consistent and predictable delivery on a national basis is a key to long-term success and value creation in the cannabis industry.”
Murphy said that with the acquisition of Form Factory, Acreage Holdings will “become the Procter & Gamble of cannabis.”