Acreage Enters Into Two Definitive Funding Agreements for up to $60 Million Gross Proceeds NEW YORK, June 01, 2020 (GLOBE NEWSWIRE) — Acreage Holdings,...

Acreage Enters Into Two Definitive Funding Agreements for up to $60 Million Gross Proceeds

NEW YORK, June 01, 2020 (GLOBE NEWSWIRE) — Acreage Holdings, Inc. (“Acreage” or the “Company”) (CSE: ACRG.U) (OTCQX: ACRGF) (FSE: 0VZ) today announced it has entered into two definitive funding agreements for a total of up to $60,000,000 in gross proceeds. The two funding agreements include:

  1. A Standby Equity Distribution Agreement (the “SEDA”) with an institutional investor (the “Investor”), under which the Company may, at its discretion, periodically sell to Investor, and pursuant to which the Investor may, at its discretion, require the Company to sell to it, up to $50,000,000 of the Company’s Class A Subordinate Voting Shares, no par value (the “Subordinate Voting Shares”), and
  2. Completion of a private placement offering, in which it issued $11,000,000 in principal amount under a secured convertible debenture, with gross proceeds to the Company of $10,000,000 before transaction fees (the “Convertible Debentures”).

FINANCING TERMS AND DETAILS

Standby Equity Distribution Agreement

For each Subordinate Voting Share purchased under the SEDA (the “Shares”), the Investor will pay the Company the greater of (i) 95% of the lowest daily volume weighted average price of the Subordinate Voting Shares on the Canadian Securities Exchange or other principal market on which the Subordinate Voting Shares are traded (the “Principal Market”) for the five consecutive trading days immediately following the date the Company or the Investor delivers notice requiring the Investor to purchase or the Company to sell the Shares under the SEDA; or (ii) the lowest price allowable under the rules of the Principal Market.

The Investor’s obligation to purchase, and the Company’s obligation to sell, the Shares under the SEDA is subject to certain conditions, including obtaining requisite relief from applicable Canadian securities regulators in respect of transactions of this nature, the Company filing and maintaining the effectiveness of a registration statement, and a supplement to the Company’s Canadian shelf prospectus, qualifying the issue and resale of the Shares and the 200,000 Subordinate Voting Shares to be issued to the Investor as consideration under the SEDA, and is limited to $500,000 per advance, and no more than $5,000,000 in the 30 days following May 29, 2020.

Acreage expects to use the proceeds for working capital and general corporate purposes.

The offer and sale of the securities in the above transaction have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws and may not be offered or sold in the United States absent registration under the Securities Act and any applicable state securities laws or an applicable exemption from such registration.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy any common shares, nor shall there be any sale of common shares in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.

Secured Convertible Indenture

The Convertible Debentures will bear interest at 15% per annum and are secured by the Company’s medical cannabis dispensaries in Connecticut. The Convertible Debenture is convertible by the holder in whole or in part after September 30, 2020. Prior to September 30, 2020, the holder may convert only $550,000 of principal amount. The Convertible Debenture is convertible into Class A Subordinate Voting Shares of the Company at $1.68 per share, subject to the conversion limitations described above. The Company has the right to redeem up to 95% of the principal amount on or prior to September 29, 2020 without penalty.

A.G.P. / Alliance Global Partners acted as sole placement agent for this private placement transaction.

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 “Arrangement”) with Canopy Growth Corporation (“Canopy Growth”). Pursuant to the Arrangement, the Acreage articles were amended to provide Canopy Growth with an option to acquire all of the issued and outstanding shares in the capital of Acreage, with a requirement to do so, upon a change 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”), subject to the satisfaction of the conditions set out in the arrangement agreement entered into between Acreage and Canopy Growth on April 18, 2019, as amended on May 15, 2019 (the “Arrangement Agreement”). Acreage will continue to operate as a stand-alone entity and to conduct its business independently, subject to compliance with certain covenants contained in the Arrangement Agreement. Upon the occurrence or waiver of the Triggering Event, Canopy Growth will exercise the option and, subject to the satisfaction or waiver of certain conditions to closing set out in the Arrangement Agreement, acquire (the “Acquisition”) each of the Subordinate Voting Shares (following the automatic conversion of the Class B proportionate voting shares and Class C multiple voting shares of Acreage into Subordinate Voting Shares) in exchange for the payment of 0.5818 of a common share of Canopy Growth per Subordinate Voting Share (subject to adjustment in accordance with the terms of the Arrangement Agreement). If the Acquisition is completed, Canopy Growth will acquire all of the Acreage Shares, Acreage will become a wholly owned subsidiary of Canopy Growth and Canopy Growth will continue the operations of Canopy Growth and Acreage on a combined basis. For more information about the Arrangement and the Acquisition please see the respective information circulars of each of Acreage and Canopy Growth dated May 17, 2019, which are available on Canopy Growth’s and Acreage’s respective profiles on SEDAR at www.sedar.com. For additional information regarding Canopy Growth, please see Canopy Growth’s profile on SEDAR at www.sedar.com.

Original Press Release

Get ahead of the crowd by signing up for 420 Investor, the largest & most comprehensive premium subscription service for cannabis traders and investors since 2013.

Published by NCV Newswire
NCV Newswire
The NCV Newswire by New Cannabis Ventures aims to curate high quality content and information about leading cannabis companies to help our readers filter out the noise and to stay on top of the most important cannabis business news. The NCV Newswire is hand-curated by an editor and not automated in anyway. Have a confidential news tip? Get in touch.


Get Our Sunday Newsletter

#mc_embed_signup{background:#fff; clear:left; } /* Add your own MailChimp form style overrides in your site stylesheet or in this style block. We recommend moving this block and the preceding CSS link to the HEAD of your HTML file. */


MJ Shareholders avatar

MJ Shareholders

MJShareholders.com is the largest dedicated financial network and leading corporate communications firm serving the legal cannabis industry. Our network aims to connect public marijuana companies with these focused cannabis audiences across the US and Canada that are critical for growth: Short and long term cannabis investors Active funding sources Mainstream media Business leaders Cannabis consumers

No comments so far.

Be first to leave comment below.

( ) ( ) ( ) ( ) ( ) ( ) ( ) ( )