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by Stockwatch Business Reporter
The Canadian Securities Exchange Composite Index inched up 1.85 points to 462.05 Wednesday. The index, a good proxy for cannabis companies, rallied a bit last week but it has slowed down again this week. That has not discouraged Acreage Holdings Inc.'s (ACRG: $6.81) chief executive officer and chairman, Kevin Murphy. Yesterday, Mr. Murphy purchased 100,000 shares of Acreage through the OTCQX at about $6.75 (U.S.) a share. Just three months ago, the Acreage CEO purchased 154,000 shares of Acreage at $12.90 (U.S.) a share. Obviously his initial investment of 154,000 shares has not fared well (he is out about $950,000), but Mr. Murphy claims to be confident that the market has oversold Acreage. "While cannabis stocks remain in turmoil, I have never been more optimistic with respect to the future of Acreage," said Mr. Murphy.
Mr. Murphy may be publicly optimistic, but shareholders will no doubt be eyeing the company's steady decline from its 52-week high of $28.30. The value of Acreage is tied to the value of Canopy Growth Corp. (WEED: $30.45), which agreed on a deal to acquire United States-based Acreage for $3.4-billion in April, 2019. At the time of the deal, Canopy Growth was trading at $59.64, while Acreage was trading at $22.35. The deal is conditional on the legalization of marijuana in the United States. If the acquisition goes through, Acreage shareholders will receive 0.5818 a share of Canopy for each Acreage share held. This leaves acreage shares trading well below their implied value of $17.71. (The implied value is the Canopy share price ($30.45) multiplied by 0.5818 (amount of Canopy shares to be received for each Acreage share).) The gap is a result of the uncertainty of federal legalization in the U.S. and the requirement for each company to operate independently until the deal goes through. Acreage has John Boehner, former Republic Congressman and Speaker of the United States House of Representatives, on its board of directors so it should be well-informed on the likelihood of U.S. legalization.
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ever seen hippie's? or the big time dealers with no teeth? you all out to lunch on cannabis, and its been proven in the numbers, let the teethless big time drug dealers living in crack houses continue with 'big money" drug dealing....all fantasy talk by 45,000 a year civil servants pushing for pay raises....gigs up, when Trudeau wins election he should can those 45,000 a year police and civil servants