Building Value for Acreage Holdings

Amended Arrangement with Canopy Growth

Acreage and Canopy Growth Corporation (“Canopy Growth”) entered into a new agreement to better align the terms of the existing arrangement involving Canopy Growth with broader market and economic factors, to provide Acreage shareholders with an initial up-front payment in connection with the modification of Canopy Growth's rights, including the extension of the term, and to give Acreage shareholders the ability to participate in upside potential upon the “Triggering Event”. Readers should refer to the proxy statement and management information circular mailed to Acreage’s shareholders in connection with the special meeting to be held on September 16, 2020.

KEY TRANSACTION HIGHLIGHTS & BENEFITS:

• Provides Up-Front Cash Payment. Canopy Growth will pay Acreage shareholders and certain convertible security holders an aggregate of US$37,500,024 (approximately US$0.30 per existing subordinate voting share (the “Existing SVS”) on an as converted basis, with the final amount to be received by each holder determined based on the number of shares at the close of business on the record date for the distribution).
  
• Attractive Valuation Premium. Acreage shareholders will be entitled to receive new subordinate voting shares (the “Fixed Shares”) to be created pursuant to the amended arrangement. Each holder of existing shares of Acreage (the “Existing Shares”) will receive Fixed Shares in an amount equal to 70% of their Existing Shares. On closing of the acquisition following the occurrence or waiver of the Triggering Event, each holder of a Fixed Share will be entitled to receive 0.3048 of a share of Canopy Growth for each Fixed Share held, representing a premium of approximately 120% to the June 24, 2020 closing price of the Existing SVS on the Canadian Securities Exchange (the “CSE”).
  
• Provides Potential Upside with Floating Shares. Acreage shareholders will be entitled to participate in the long-term value created by Acreage, and in the U.S. cannabis industry generally, as a result of the new subordinate voting shares (the “Floating Shares”) to be created pursuant to the amended arrangement. Each holder of Existing Shares will receive Floating Shares in an amount equal to 30% of their Existing Shares. On closing of the acquisition following the occurrence or waiver of the Triggering Event, Canopy Growth may acquire the Floating Shares at a price based upon the 30-day volume-weighted average trading price of the Floating Shares on the CSE relative to the trading price of the shares of Canopy Growth on the NYSE at that time, subject to a minimum of US$6.41 per Floating Share.
  
• Alignment with Economic and Financial Market Conditions. Considering the challenging economic environment and increasingly difficult and volatile financial market conditions, particularly for cannabis companies, Acreage determined that the new arrangement with Canopy Growth represents the best current prospect for viability and the preservation of value for Acreage shareholders.

"The United States is going to be a core market for Canopy Growth and this new agreement solidifies our path forward with Acreage," said David Klein, Chief Executive Officer of Canopy Growth. "I am excited to bring our relationship with Acreage back to centre stage in our U.S. strategy and look forward to a time when the laws in the United States permit us to finalize this transaction as we march toward bringing our exciting beverage products to the US."