Canopy Growth plans to acquire California’s Jetty Extracts if & when federal legalization happens

Canopy Growth plans to acquire California’s Jetty Extracts if & when federal legalization happens
CANNANNEW REPORT

Canopy Growth Corp. has signed a deal that will give it the right to acquire California cannabis company Jetty Extracts, if the U.S. federally legalizes the main ingredient in marijuana. The deal announced Wednesday is structured as two separate option agreements that give a subsidiary Smiths Falls, Ont.-based Canopy set up the ability to acquire up to 100 per cent of Jetty’s equity interests upon legalization or if Canopy exercises its rights earlier. Under the agreements, Canopy will make aggregate and upfront payments of cash and common shares totalling about US$69 million in exchange for a 75 per cent interest in Jetty, which is registered as Lemurian, Inc. Once Canopy exercises its right to acquire all of the interests, it will begin making extra payments through cash and common shares. The deal is meant to lay the groundwork for Canopy’s expansion into the U.S. should the country look to turn its patchwork of cannabis policies into a single federal stance. Marijuana is currently legal for medical purposes in about 39 states and for recreational use in roughly 19. However, federal laws still consider it a Schedule I controlled substance with high risk of abuse and no accepted medical use, putting it in the same class as drugs like heroin and peyote. In recent months, the U.S. has been edging toward federal legalization through the More Act, which would declassify marijuana as a controlled substance, eliminate criminal penalties around its use and establish a system to expunge cannabis convictions. In the event the act passes, Canadian cannabis companies have been scrambling to buy U.S. assets and plot a path into the market, which some suggest will be more lucrative than Canada’s. Canopy already has the right to acquire U.S. cannabis company Acreage Holdings, Inc. and Colorado-based edibles maker Wana Brands, as…

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Source : Canopy Growth plans to acquire California’s Jetty Extracts if & when federal legalization happens

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