Canadian Canopy Growth has signed a $3.4 billion agreement to acquire the medical marijuana firm Acreage Holdings.

The company has agreed to buy the New York-based marijuana company in a cross-border deal.

Ken Shea, an analyst at Bloomberg Intelligence remarked on Canopy’s endeavor that “They know the U.S. is the biggest prize of all.”

Shares of Canopy had gained as much as 12% on the news.

“Our right to acquire Acreage secures our entrance strategy into the United States as soon as a federally permissible pathway exists,” Canopy Chief Executive Officer Bruce Linton stated. “By combining Acreage’s management team, licenses and assets with Canopy Growth’s intellectual property and brands, there will be tremendous value creation for both companies’ shareholders.”

As part of the deal, Canopy will initially pay $300 million in cash to shareholders of Acreage and shareholders will receive a further 0.5818 of a Canopy share when cannabis becomes legal in the U.S.

“Having access to Canopy Growth’s deep resources will enable us to innovate, develop and distribute quality cannabis brands across the U.S. and continue expanding our U.S. footprint,” Acreage CEO Kevin Murphy stated.

According to Murphy,“a confluence of factors are making it much more difficult for a multi-state operator to achieve its full potential.”

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