Stocks of Canopy Growth Corp (TSX:WEED) (NYSE:CGC) were seesawing up and down in early trading Friday after taking a dip Thursday following the previous day’s upward swing on the news that the Canadian-based marijuana company had made a C$73.8-million all-cash deal to acquire British skin-care company This Works.
The latest fluctuations in share price are most likely a reflection of the cannabis giant’s subsequent move – the announcement yesterday of the official filing of management information circulars in relation to its planned acquisition of U.S. cannabis producer Acreage Holdings. Shareholders of both companies are now scheduled to approve the deal June 19.
The colossal US$3.4-billion deal is a unique move between the two cannabis producers on opposite sides of the border, because it will only be triggered when marijuana will be legalized in the U.S.
The strategy behind the deal is to give Canopy Growth a pathway into the world’s largest marijuana market, as Acreage is already licensed in 20 states.
If the deal is approved next month, it will signal Canopy Growth’s continued march in securing its position as the largest cannabis company on the globe.
Since the beginning of 2019, Canopy shares have gained 54.4%. It’s scheduled to report its latest earnings on June 20, one day after the Acreage deal is set to be ratified by shareholders.