Acreage Enters Into Two Funding Agreements

Definitive funding agreements for a total of up to $60,000,000 in gross proceeds.

Acreage Holdings, Inc. (CSE: ACRG.U) today announced it has entered into two definitive funding agreements for a total of up to $60,000,000 in gross proceeds. The two funding agreements include:

  1. A Standby Equity Distribution Agreement with an institutional investor, under which the Company may, at its discretion, periodically sell to Investor, and pursuant to which the Investor may, at its discretion, require the Company to sell to it, up to $50,000,000 of the Company's Class A Subordinate Voting Shares, no par value and
  2. Completion of a private placement offering, in which it issued $11,000,000 in principal amount under a secured convertible debenture, with gross proceeds to the Company of $10,000,000 before transaction fees.


Standby Equity Distribution Agreement

For each Subordinate Voting Share purchased under the SEDA, the Investor will pay the Company the greater of (i) 95% of the lowest daily volume-weighted average price of the Subordinate Voting Shares on the Canadian Securities Exchange or other principal markets on which the Subordinate Voting Shares are traded for the five consecutive trading days immediately following the date the Company or the Investor delivers notice requiring the Investor to purchase or the Company to sell the Shares under the SEDA, or (ii) the lowest price allowable under the rules of the Principal Market.

The Investor's obligation to purchase, and the Company's obligation to sell, the Shares under the SEDA is subject to certain conditions, including obtaining requisite relief from applicable Canadian securities regulators in respect of transactions of this nature, the Company filing and maintaining the effectiveness of a registration statement, and a supplement to the Company's Canadian shelf prospectus, qualifying the issue and resale of the Shares and the 200,000 Subordinate Voting Shares to be issued to the Investor as consideration under the SEDA, and is limited to $500,000 per advance, and no more than $5,000,000 in the 30 days following May 29, 2020.

Acreage expects to use the proceeds for working capital and general corporate purposes.

The offer and sale of the securities in the above transaction have not been registered under the Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold in the United States absent registration under the Securities Act and any applicable state securities laws or an applicable exemption from such registration.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy any common shares, nor shall there be any sale of common shares in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.

Secured Convertible Indenture

The Convertible Debentures will bear interest at 15% per annum and are secured by the Company's medical cannabis dispensaries in Connecticut. The Convertible Debenture is convertible by the holder in whole or in part after September 30, 2020.  Prior to September30, 2020, the holder may convert only $550,000 of the principal amount. The Convertible Debenture is convertible into Class A Subordinate Voting Shares of the Company at $1.68 per share, subject to the conversion limitations described above. The Company has the right to redeem up to 95% of the principal amount on or prior to September 29, 2020, without penalty.

A.G.P. / Alliance Global Partners acted as sole placement agent for this private placement transaction.

To learn more about Acreage Holdings, visit the company HQ here.

Disclaimer: Past performance is not an indicator of future performance.

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Casey Peternell
Casey Peternell

Casey is a media and content creator with a keen eye for creativity. Casey is currently in the process of obtaining a double bachelors degree in Media & Communications and Business from Swinburne University in Melbourne.

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