Over the past several years, we have seen more states across the U.S. that have been legalizing marijuana, not only for medical use, but also for recreational use. However, at the federal level, marijuana is still considered illegal. Yet, many believe that this could change relatively soon based on a recent deal where Acreage Holdings, a U.S. company, was bought by Canopy Growth in Canada.
Typically, this type of sale would not be allowed because it is still illegal for Canadian marijuana companies to have operations in the United States. However, they were able to structure their deal in a way that they could option to buy Acreage after legalization occurs in the United States. They still had to pay $300 million now to secure the much larger deal.
You have to wonder why a company in Canada would pay this much money if they did not believe that federal legalization would be coming soon. How could they have any idea that this might be happening? It is important to remember that John Boehner, the former Speaker of the House, is part of the board of Acreage Holdings.
Naturally, he still has a number of contacts in Washington, D.C., which could provide him with some better insight into what is likely to happen in terms of marijuana legalization in the near future. After all, it isn’t likely that Canopy Growth would want to tie up $300 million that they can’t use for too long. Therefore, many believe that federal legalization is just around the corner.
Resources: Sean Mac