Do Recent Corporate Cannabis Mergers Signal Imminent Nationwide Legalization?

When negotiating any sort of deal – be it real estate or reefer – one term you always need to watch out for is contingency. If you are trying to sell your home, for example, and an interested buyer comes along and makes you a full price offer, you’d be happy about that. But what if that potential buyer’s offer includes a contingency that they can only finalize the deal on your house once their current house sells? That certainly doesn’t sweeten the deal, does it?

Earlier this month the Canadian cannabis megalith Canopy Growth – the first North American cannabis company to be publicly traded on the New York Stock Exchange – rocked the weed world with a curious and somewhat veiled announcement that they would be acquiring U.S.-based Acreage Holdings, in a merger to the tune of $3.4 billion.

The corporate sprawl of Acreage Holdings now blankets 20 states and has amassed 87 licenses for retail cannabis dispensaries as well as 22 more for cultivation and processing sites.

This acquisition will position Canopy Growth (already the #1 cannabis stock in the world by market cap) atop the global cannabis industry as they look to expand their empire into cannabis and hemp production in the U.S. and across the globe.

But as industry watchdogs immediately pointed out, such a merger with a “plant-touching” company like Acreage in the United States would certainly jeopardize Canopy’s standing on the federally regulated New York Stock Exchange considering the fact that cannabis is still highly illegal in the eyes of Big Brother here in America.

Enter the contingency.

A half-baked press release put out to announce the merger shed some light on the strategy to avoid such conflicts of interest with the U.S. federal government. At first glance it appears that the entire deal hinges on one major contingency – the ink on the three and a half billion dollar agreement will not be dry until the U.S. legalizes cannabis on the federal level.

Whoa… now that’s a big deal, right?

This trigger point in the alleged deal got conspiracy-minded folks like me trying to figure out what it really meant and when you follow the money at Acreage, you end up with John Boehner, former Republican Congressman and Speaker of the House, who now resides on the board of the quasilegal cannabis company that Canopy is trying to acquire.

When a staunch social Conservative like Boehner did his own personal flip-flop on cannabis, most folks saw it as a cash grab on what everyone now recognizes is a lucrative opportunity.

But his reign in and over the United States Congress did not end that long ago, and as those conspiracy gears continue to turn it is hard not to come to the conclusion that this D.C. insider knows something about federal legalization that the rest of us don’t.

After all, there is way more than $3.4 billion at stake here.

Last year alone, legal sales revenues of weed worldwide spiked to a new high of over $12.2 billion and that number is expected to jump again this year by roughly 40%, up over $16.9 billion.

But Canopy Growth’s CEO, Bruce Linton, is not satisfied with his companies utter dominance in the cannabis sector (a $16.5 billion market cap and a presence in 15 countries… and counting) and he says that his only competitor doesn’t have a name, a brand, or a Board of Directors. No, he says that his biggest competitors are the unregulated black markets found in his own country of Canada, certainly here in the U.S., and everywhere else you find weed in the world.

As we know, money talks in politics. So is the pressure being applied by a deal like the Canopy/Acreage acquisition an indicator that we’re about to see transformative cannabis reform at the highest levels of our federal government here in the U.S.?

We’re not so confident, unfortunately. Here are a few reasons why.


A recent Gallup poll revealed that 66% of Americans support the legalization of cannabis on a nationwide scale. 33 states plus Washington, D.C. have implemented medical marijuana laws for their residents and 10 more have gone a step further to legalize the plant for adult recreational use as well. This number is sure to continue to grow as these programs have, in most cases, been successful by all measures and free from the Reefer Madness warnings of society going down in flames or whatever the Prohibitionists keep screaming about.

Multiple pieces of highly consequential cannabis-related legislation are steadily making their way through the sausage-making process of American politics, including the STATES Act, the CARERS Act, and some comprehensive banking reform bills that would give a huge boost to cannabis markets nationwide.

The STATES Act, for example, introduced by Democratic Senator and presidential hopeful Elizabeth Warren and Colorado Republican Cory Gardner, would exempt cannabis companies who are operating legally under their home state’s regulations from being held subject to federal prosecution under the 1970 Controlled Substances Act.

The bill screams “STATE’S RIGHTS MATTER!”, the alleged rallying cry for conservatives over the past decade in their arguments for banning abortions or gay marriages, and even the Republican U.S. Attorney General William Barr has voiced his support of the Act. But still, Republican lawmakers control the Senate for at least another year and a half and they have proven to be consistent deal breakers instead of deal makers when it comes to weed.

At the top of that pile is Kentucky Republican, Mitch McConnell, who has all but broken his arm patting himself on the turtle shell over the passage of the 2018 Farm Bill that (sort of) ended the decades-long federal prohibition of the hemp plant.

McConnell, more embattled than ever, faces re-election in 2020 and is staking a large part of his campaign on hemp and hemp farming. Not only does he never mention any desire to lend that same energy to cannabis legalization, you have to think that he sees it as competition of some sort for the non-intoxicating cash crop that he has chosen to champion.

This is the same guy that obstructed the government so hard in favor of his own ideology that our Supreme Court only had eight justices for a year all to spite former President Obama, so he is no minor speed bump on the road to legalization. He is a hempcrete wall and will have to be dealt with before we get the reform we deserve.


Everyone is talking about cannabis this year… literally. I was in a book store a few weeks ago and they had some hemp-derived CDB lotion for sale and I overheard one little girl say to her friend, “My aunt uses CBD lotion on her hands and wrists and she says it makes them feel better.”

Although the only real Republican candidate for president in 2020 is busy repeating “Fake news, no collusion!” the incredibly wide and diverse assembly of candidates running on the Democratic side have already been grilled hard for their stance on cannabis reform and the plant promises to be a platform plank for whoever emerges from that field.

The thing is, as widely discussed as it is, a Quinnipiac poll from April of last year revealed that just 13% of voters polled said that they would oppose a political candidate who they mostly agreed with, but differed with on marijuana policy.

Honestly, that’s a pretty impressive number and a legit bloc of voters, but the reality is that there will still be much more consequential issues at stake in the minds of voters in 2020 and candidates will gravitate to those topics, most likely pushing hearty cannabis debates until after November of next year.


The Canopy/Acreage agreement piqued a lot of interest in both countries and has certainly fanned the flames of federal reform here in the U.S. but a closer look at the what little we know of the deal so far reveals that nobody is expecting anything to happen overnight.

First of all, the deal only delivers $300 million up front, and Acreage only receives about half of that in liquid form. For Canopy that is the loose change in the ashtrays of their Bentleys, a cheap price to pay to reserve the rights to a major player like Acreage.

Secondly, they have essentially reserved the right to “trigger” the deal anytime in the next 90 months. That is 7.5 years… So they are cool with continuing to build their massive empire until 2026 before they even wake this new monster.

Some insiders say that it would not even take full-scale federal legalization in the U.S. to trigger the contingency in the deal and that something as within reach as the STATES Act could be enough to get Canopy hands-on into the American cannabis game.

Canopy execs have even hinted that they might not even wait for the American government to get its act together, and they may just risk whatever gains they are currently getting from the stock exchange in order to rake in windfall profits from the plant itself.

“I think its a very unlikely scenario, but we built in a provision where we can simply trigger it. And it would have some cascading consequences, but we wouldn’t lose the deal,” Canopy CEO Bruce Linton told

So, will cannabis be federally legal in the U.S. soon?

I guess it depends on how soon you think “soon” will be, but our money is on sometime “soon” after the next presidential election, regardless of who wins.

Post by Jack Riordan

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