Mr. David Klein of Canopy Growth reports

CANOPY GROWTH AND ACREAGE CONFIRM CANOPY USA'S COMPLETED ACQUISITION OF ACREAGE

Canopy Growth Corp. and Acreage Holdings Inc. have confirmed that Canopy USA LLC has completed its acquisition of Acreage. Canopy USA now owns 100 per cent of the issued and outstanding shares of Acreage.

Together with the completed acquisition of 100 per cent of Wana Wellness LLC, The CIMA Group LLC and Mountain High Products LLC, as announced on Oct. 9, 2024, and approximately 77 per cent of the shares of Lemurian Inc. (Jetty) as announced on June 4, 2024, Canopy USA is fulfilling its ambition of establishing a leading brand-focused cannabis company in the United States.

"Completing the acquisition of Acreage marks the final step in establishing Canopy USA as a unified platform, which we believe offers significant upside, as the Canopy USA portfolio of brands can now capitalize on the rapidly expanding U.S. cannabis market, independent of the need for federal legalization," said David Klein, chief executive officer, Canopy Growth, and member of the board of managers of Canopy USA. "With a vertically integrated presence across key U.S. states in the Midwest and northeast, as well as licensing agreements which support asset-light operations in state-legal markets nationally, Canopy USA is well positioned to demonstrate efficient growth ahead."

"Together with Wana and Jetty, two highly respected cannabis brands in the U.S., Acreage has an incredible opportunity to drive combined growth and innovation under Canopy USA," said Dennis Curran, chief executive officer, Acreage. "With Acreage's product portfolio, established retail presence and production capabilities across the Midwest and northeast, this integration positions Acreage to expand its reach, better serve its customers and deliver meaningful value to the market. It is exciting to see the opportunities ahead and the shared vision under Canopy USA."

The completed acquisitions of Acreage and Wana and approximately 77 per cent of the shares of Jetty are expected to enable Canopy USA to realize anticipated financial benefits, including revenue growth and cost synergies, marketing efficiencies, and joint sales advantages across key cannabis product categories such as vapes, edibles and flower.

Overview of Canopy USA strategy:

• Fast-tracks entry into the world's largest and fastest-growing cannabis market: The U.S. retail cannabis market is projected to be as high as approximately $50-billion (U.S.) in 2026, and this strategy aims to unlock the ability to capture share and return on investments made to date.
• Establishes a leading, brand-focused powerhouse: Canopy USA's portfolio includes some of the most recognized, iconic cannabis brands in the U.S. that Canopy USA believes are ideally positioned in the fastest-growing categories, such as edibles, vapes and flower. Canopy USA is expected to leverage the best of each brand's offerings to accelerate growth and market expansion across key U.S. states.
• Financial benefit through revenue and cost synergies within Canopy USA: The combination of U.S. cannabis assets is expected to generate revenue and cost synergies within Canopy USA by leveraging the brands, routes to market and operations of the full U.S. cannabis ecosystem while eliminating redundancies across certain of the U.S. tetrahydrocannabinol portfolio of assets and the public company reporting costs of Acreage.
• Highlights the value of Canopy USA's U.S. THC assets: While Canopy Growth will not consolidate the financial results of Canopy USA, Canopy Growth expects to begin to highlight the value of Canopy USA's U.S. THC assets to investors now that the Acreage acquisition is complete. Canopy Growth now holds all of the issued and outstanding non-voting shares in the capital of Canopy USA, representing approximately 84.4 per cent of the issued and outstanding shares in Canopy USA on an as-converted basis.

Acreage acquisition

In connection with the: (i) arrangement agreement dated April 18, 2019, as amended, between Canopy Growth and Acreage and the amended and restated plan of arrangement in connection therewith; and (ii) arrangement agreement dated Oct. 24, 2022, as amended, among Canopy Growth, Acreage and Canopy USA, Canopy USA acquired all of the issued and outstanding Class D subordinate voting shares of Acreage on the terms and conditions set forth in the plan of arrangement in connection therewith. Immediately following the completion of the floating share acquisition, Canopy USA acquired all of the issued and outstanding Class E subordinate voting shares of Acreage. As a result of these transactions, Canopy USA acquired 100 per cent of the issued and outstanding shares of Acreage. Immediately prior to the completion of the Acreage acquisition, Canopy USA did not own any shares of Acreage.

In accordance with the floating share acquisition, registered holders of Acreage floating shares received 0.045 of a common share of Canopy Growth for each Acreage floating share held by such holder of Acreage Floating shares. In connection with the fixed share acquisition, each of the outstanding Acreage fixed shares was exchanged for a fraction of a Canopy share per Acreage fixed share, as adjusted pursuant to the terms and conditions set forth in the fixed share arrangement. In aggregate, Canopy Growth issued approximately 5.89 million Canopy shares (with a value equal to approximately $21.2-million (U.S.)) to former Acreage shareholders, as well as approximately 306,000 Canopy shares issuable in connection with Canopy USA's acquisition of the minority interests of certain subsidiaries of Acreage.

As previously disclosed, Canopy Growth agreed to make a payment with a value of approximately $19.5-million (U.S.) in Canopy shares to an eligible participant pursuant to the existing tax receivable bonus plans of a subsidiary of Acreage (as amended). Immediately prior to closing the floating share acquisition, Canopy Growth satisfied this payment by issuing the bonus payment Canopy shares at a deemed price of $3.82 (U.S.) per bonus payment Canopy share (being the volume-weighted average trading price of the Canopy shares on the Nasdaq during the 10 consecutive trading days ending on the second trading day prior to the closing date of the Acreage acquisition) to a participant under the bonus plans. Canopy Growth has also agreed to register the resale of the bonus payment Canopy shares under the Securities Act of 1933, as amended.

Immediately following the closing of the Acreage acquisition, Canopy Growth issued 1,315,553 Canopy shares (at a price equal to the closing price of the Canopy shares on the Nasdaq immediately prior to the closing date of the Acreage acquisition less a 7.5-per-cent discount) and 1,197,658 common share purchase warrants to certain securityholders of Acreage to satisfy an outstanding put liability. Each warrant entitles the holder to acquire one Canopy share at an exercise price equal to the volume-weighted average trading price of the Canopy shares on the Nasdaq during the five consecutive trading days immediately prior to the closing date of the Acreage acquisition until June 6, 2029. Canopy Growth has agreed to provide the holders with customary registration rights.

Acreage will apply to cease to be a reporting issuer in Canada, and the Acreage shares are expected to be delisted from the Canadian Securities Exchange on or around Dec. 9, 2024, which is expected to generate significant savings to Acreage and Canopy USA in respect of public company reporting costs.

Full details of the Acreage acquisition are set out in the proxy statement and management information circular of Acreage dated Aug. 17, 2020, and the proxy statement and management information circular of Acreage dated Feb. 14, 2023, copies of which can be found under Acreage's profile on SEDAR+. A copy of the early warning report of Canopy USA in connection with the Acreage acquisition will be filed under Acreage's profile on SEDAR+ and can be obtained by contacting Corey Sheahan, executive vice-president, general counsel and secretary, at 646-600-9181 or at Canopy USA's head office.

A letter of transmittal with respect to the fixed share acquisition and the floating share acquisition has been mailed to registered Acreage shareholders. The letters of transmittal have been filed by Acreage under Acreage's profile on SEDAR+ and with the U.S. Securities and Exchange Commission through EDGAR.

All registered Acreage shareholders with physical certificate(s) are required to send their certificate(s) representing their Acreage fixed shares and/or Acreage floating shares with a completed letter of transmittal to Canopy Growth's transfer agent, Odyssey Trust Company, in accordance with the instructions provided in the applicable letter of transmittal. Acreage shareholders who hold their Acreage fixed shares and/or Acreage floating shares through a broker or other intermediary and do not have Acreage shares registered in their name do not need to complete the applicable letter(s) of transmittal. Such shareholders of Acreage should contact their broker or other intermediary. All registered Acreage shareholders with direct registration notice statement(s) representing their Acreage floating shares will automatically be sent DRS statement(s) representing their Canopy shares by Odyssey without needing to complete a letter of transmittal.

As a result of the labour dispute at Canada Post, registered Acreage shareholders are encouraged to contact Odyssey with any questions by e-mail at shareholders@odysseytrust.com in the event that registered Acreage shareholders have not received copies of their DRS statement(s) or certificate(s) representing their Canopy shares following the closing of the Acreage acquisition and completion and delivery of their letter of transmittal to Odyssey.

Advisers and counsel

Cassels Brock & Blackwell LLP and Paul Hastings LLP acted as Canadian and U.S. legal counsel, respectively, to Canopy Growth. Greenhill & Co. Canada Ltd. acted as financial adviser to Canopy Growth.

DLA Piper (Canada) LLP and Cozen O'Connor acted as Canadian and U.S. legal counsel, respectively, to Acreage. Canaccord Genuity Corp. and Eight Capital acted as financial advisers to Acreage.

About Canopy Growth Corp.

Canopy Growth is a world-leading cannabis company dedicated to unleashing the power of cannabis to improve lives.

Through an unwavering commitment to its consumers, Canopy Growth delivers innovative products with a focus on premium and mainstream cannabis brands, including Doja, 7Acres, Tweed and Deep Space, in addition to category defining vaporizer technology made in Germany by Storz & Bickel.

Canopy Growth has also established a comprehensive ecosystem to realize the opportunities presented by the U.S. THC market through an unconsolidated, non-controlling interest in Canopy USA. Canopy USA has closed the acquisitions of approximately 77 per cent of the shares of Jetty, 100 per cent of Wana and 100 per cent of Acreage, a vertically integrated multistate cannabis operator with principal operations in densely populated states across the northeast and Midwest. Jetty owns and operates Jetty Extracts, a California-based producer of high-quality cannabis extracts and pioneer of clean vape technology, and Wana is a leading North American edibles brand.

Beyond its world-class products, Canopy Growth is leading the industry forward through a commitment to social equity, responsible use and community reinvestment -- pioneering a future where cannabis is understood and welcomed for its potential to help achieve greater well-being and life enhancement.

About Acreage Holdings Inc.

Acreage is a multistate operator of cannabis cultivation and retailing facilities in the U.S., including its national retail store brand, The Botanist. With its principal address in New York, Acreage's wide range of national and regionally available cannabis products includes the award-winning brands The Botanist and Superflux, the Prime medical brand in Pennsylvania, and others. Acreage has focused on building and scaling operations to create a seamless, consumer-focused, branded experience.

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