May 17, 2019

Dear Shareholder:


The Board of Directors (the “Acreage Board”) of Acreage Holdings, Inc. (“Acreage”) cordially invites you to attend the special meeting (the “Meeting”) of its shareholders (the “Shareholders”) to be held at 10:00 a.m. (EDT) on June 19, 2019 at the offices of DLA Piper (Canada) LLP, 1 First Canadian Place, 100 King Street West, Suite 6000, Toronto, Ontario M5X 1E2. At the Meeting, you will be asked to consider and, if deemed advisable, approve a special resolution approving a proposed arrangement (the “Arrangement”) under the Business Corporations Act (British Columbia) pursuant to which, among other things, the Articles of Acreage will be amended to provide Canopy Growth Corporation (“Canopy Growth”) with the option (the “Canopy Growth Call Option”) to acquire all of the issued and outstanding shares in the capital of Acreage (each, an “Acreage Share”), with a requirement to do so upon a change in federal laws in the United States to permit the general cultivation, distribution and possession of marijuana (as defined in the relevant legislation) or to remove the regulation of such activities from the federal laws of the United States (the “Triggering Event”), subject to the satisfaction of the conditions set out in the arrangement agreement entered into between Acreage and Canopy Growth on April 18, 2019, as amended on May 15, 2019 (the “Arrangement Agreement”).


Please complete the enclosed form of proxy and submit it to our transfer agent and registrar, Odyssey Trust Company, as soon as possible but not later than 48 hours (excluding Saturdays, Sundays and holidays) prior to the time of the Meeting or any adjournment or postponement thereof.


Under the terms of the Arrangement Agreement, the Articles of Acreage will be amended to provide Canopy Growth with the Canopy Growth Call Option in exchange for an aggregate payment of US$300 million to Shareholders and certain holders of securities exchangeable for Acreage Shares (as described in the enclosed management information circular (the “Circular”)). It is estimated that each Shareholder will receive approximately US$2.51 - US$2.63 per Class A subordinate voting share (“Subordinate Voting Share”) and an amount in respect of all other classes of Acreage Shares determined on an as converted to Subordinate Voting Share basis, with the amount to be received in respect of each Acreage Share to be adjusted to reflect the total Acreage Shares and the relevant securities exchangeable for Acreage Shares outstanding at the Initial Effective Time (as defined in the Circular), including Acreage Shares that may be issued, including Acreage Shares that may be issued should the closing of previously announced acquisitions be completed, prior to the Initial Effective Time, and assuming that the Arrangement is implemented at the end of June 2019. Upon the occurrence of the Triggering Event, Canopy Growth is required to exercise the Canopy Growth Call Option and, subject to the satisfaction or waiver of the conditions to closing set out in the Arrangement Agreement, acquire (the“Acquisition”) each of the Subordinate Voting Shares (following the automatic conversion of the Class B proportionate voting shares and Class C multiple voting shares of Acreage into Subordinate Voting Shares) for the payment of 0.5818 of a common share of Canopy Growth (each whole common share, a “Canopy Growth Share”) per Subordinate Voting Share (subject to adjustment in accordance with the terms of the Arrangement).


At the date the transaction was announced, the total implied consideration to be received by Shareholders represents a premium of approximately 40% over the 30-day volume-weighted average trading price of the Subordinate Voting Shares on the Canadian Securities Exchange for the period ended April 17, 2019 (being the last trading day prior to announcement of the transaction), based on Canopy Growth’s 30-day volume-weighted average trading price on the NYSE for the period ended April 17, 2019. There can be no guarantee as to the value of a Canopy Growth Share at the time of the Acquisition.


We anticipate several benefits from the proposed Arrangement, including but not limited to (i) affiliation with Canopy Growth, the largest and best-capitalized cannabis player in the world, including access to Canopy Growth’s industry-leading brands, intellectual property and know-how, (ii) complementary operations between Canopy Growth and Acreage, creating the pre-eminent global cannabis company and providing Acreage with international exposure while allowing it to focus on the U.S. cannabis industry, (iii) increased liquidity for Shareholders, and (iv) the ability for Shareholders to participate in the future growth of the combined company, led by an experienced management team with a proven track record. For additional information with respect to these and other anticipated benefits of the Arrangement, see the section in the Circular entitled “The Arrangement Reasons for the Arrangement”.


The resolution adopting the Arrangement (the “Arrangement Resolution”) must be approved by at least 662/3% of the votes cast by the holders of Acreage Shares, voting together as a single class. In addition, the Arrangement Resolution is subject to approval by a simple majority of the votes cast by the holders of Subordinate Voting Shares and Proportionate Voting Shares, voting together as a single class, excluding the votes in respect of Acreage Shares which are owned, held, controlled or directed by Kevin Murphy. See the sections in the Circular entitled “The Arrangement Required Shareholder Approvals” and “Securities Law Matters Canadian Securities Laws Multilateral Instrument 61-101”.


INFOR Financial Inc. has delivered an opinion to the special committee of independent directors of Acreage (the “Acreage Special Committee”), which states that, as of the date thereof, and subject to the assumptions, qualifications and limitations set out therein, the Consideration (as defined in the Arrangement Agreement) to be received by Shareholders pursuant to the Arrangement is fair, from a financial point of view, to the Shareholders (the “INFOR Financial Opinion”). 


Canaccord Genuity Corp. (“Canaccord Genuity”) has delivered an opinion to the Acreage Board, which provides that, as of the date thereof, and subject to the assumptions, qualifications and limitations set out therein, and such other matters as Canaccord Genuity considered relevant, the Consideration to be received by Shareholders pursuant to the Arrangement is fair, from a financial point of view, to the Shareholders (other than Canopy Growth and/or its affiliates) (the “Canaccord Genuity Opinion” and, together with the INFOR Financial Opinion, the “Fairness Opinions”). A copy of the INFOR Financial Opinion and the Canaccord Genuity Opinion are included as Appendix “G” and Appendix “H”, respectively, to the Circular. Shareholders are urged to read the Fairness Opinions in their entirety.


Acreage is continually engaged in considering its strategic alternatives, and is focused on creating value for its Shareholders and maintaining a leading position in a growing and competitive industry. This is the basis for the Arrangement Agreement, which among other things, will provide Acreage with immediate access to Canopy Growth’s brands, access to certain research, development and innovation capabilities from the world’s largest cannabis company, and will enable Acreage to leverage Canopy Growth’s extensive operating know-how and experience, both within North America and internationally. Acreage believes that, for the reasons set out in the Circular, among others, the Arrangement will better position Acreage for long-term growth and success in the world’s largest cannabis market.


After careful consideration of a number of alternatives and factors, consultations with its financial advisor and legal advisors and receipt of the Fairness Opinions and of the recommendation from the Acreage Special Committee, the members of the Acreage Board unanimously (with the exception of Kevin Murphy, who declared his interest in the Arrangement and abstained from voting in respect thereof) determined that the Arrangement is in the best interests of Acreage and recommend that Shareholders vote FOR the Arrangement Resolution. 


Your vote is important regardless of the number of Acreage Shares you own. All Shareholders are encouraged to take the time to complete, sign, date and return the applicable form of proxy in accordance with the instructions set out therein and in the accompanying Circular so that your Acreage Shares can be voted at the Meeting in accordance with your instructions. If you are a non-registered Shareholder and hold your Acreage Shares through a broker, custodian, nominee or other intermediary, please follow their instructions.


While certain matters, such as the timing of the receipt of court approval and the satisfaction of certain other conditions, are beyond the control of Acreage, if the requisite approvals are obtained from Shareholders, it is anticipated that the Arrangement will be completed at the end of June 2019.


If you have any questions regarding the submission of your proxy, please contact Odyssey Trust Company, at its North American toll-free number: 1-888-290-1175 or Kingsdale Advisors, the strategic advisor and the proxy solicitation agent for Acreage, by telephone at 1-866-229-8651 toll-free in North America (+1-416-867-2272 collect) or by e-mail at


On behalf of Acreage, I would like to thank all Shareholders for your ongoing support as we prepare to take part in this important event in the history of Acreage.


Yours very truly,


(Signed) “Kevin P. Murphy”

Kevin P. Murphy

Chairman and Chief Executive Officer