Canopy Growth Announces Plan to Acquire Leading U.S. Multi-State Cannabis Operator, Acreage Holdings Proposed Deal Complements Canopy Growth's U.S. CBD Strategy With An Accelerated Pathway Into U.S. Cannabis Markets, Onc

Canopy Growth Announces Plan to Acquire

Leading U.S. Multi-State Cannabis Operator, Acreage Holdings

Proposed Deal Complements Canopy Growth's

U.S. CBD Strategy With An Accelerated Pathway Into U.S. Cannabis Markets, Once Federally Permissible

Deal Structure Expected to Provide Improved

Access to Capital for Acreage, Paving Way for Accelerated Expansion

SMITHS FALLS, ON and NEW YORK, April 18,

2019 /CNW/ - Canopy Growth Corporation ("Canopy Growth") (TSX: WEED) (NYSE: CGC) and Acreage Holdings, Inc.

("Acreage") (CSE: ACGR.U) (OTC: ACRGF) (FSE: 0ZV) (together, the "Companies") are pleased to

announce that they have entered into a definitive arrangement agreement that grants Canopy Growth the right to acquire 100 percent

of the shares of Acreage (the "Right"), with a requirement to do so at such time as cannabis production and sale

becomes federally legal in the United States (the "Transaction"), subject to obtaining the requisite prior approval

of the shareholders of each of Acreage and Canopy Growth, respectively (the "Shareholder Approval"), as well as

the approval of the Supreme Court of British Columbia (the "Court Approval").

Canopy Growth Announces Plan to Acquire Leading

U.S. Multi-State Cannabis Operator, Acreage Holdings (CNW Group/Canopy Growth Corporation)

Following the approval of Canopy Growth and

Acreage shareholders as well as the Supreme Court of British Columbia, under the terms of the arrangement agreement (the "Agreement"),

Acreage Holders (as defined below) will receive an immediate aggregate total payment of US$300 million or approximately US$2.55

per Acreage Subordinate Voting Share (the "Up-Front Cash Premium") based on the currently outstanding Subordinate

Voting Shares of Acreage and conversion of certain convertible securities described below. In addition, upon the exercise

of the Right, holders of subordinate voting shares of Acreage (the "Acreage Subordinate Voting Shares") will receive

0.5818 of a common share of Canopy Growth (the "Canopy Shares") for each Acreage Subordinate Voting Share held

(the "Exchange Ratio") at the time of closing of the Transaction. Upon exercise of the Right, the total consideration

payable pursuant to the Transaction is valued at approximately US$3.4 billion on a fully-diluted basis, represents

a premium of 41.7% over the 30-day volume weighted average price of the Acreage Subordinate Voting Shares on the Canadian Securities

Exchange (the "CSE") ending April 16, 2019 (based on the Exchange Ratio, Up-Front Cash Premium and the 30-day volume

weighted average price of Canopy Shares as at April 16, 2019).

The Companies will also execute a licensing

agreement granting Acreage access to Canopy Growth's award-winning line-up of brands such as Tweed and Tokyo Smoke, along with

other intellectual property. Once the Right is exercised, Acreage will become part of a leading global cannabis company with access

to markets beyond the U.S. Until then, the two companies will continue to operate independently.

"Today we announce a complex transaction

with a simple objective. Our right to acquire Acreage secures our entrance strategy into the United States as soon as a federally-permissible

pathway exists," said Bruce Linton, Chairman and co-CEO, Canopy Growth. "By combining Acreage's management team, licenses

and assets with Canopy Growth's intellectual property and brands, there will be tremendous value creation for both companies' shareholders."

"From the first day we created our company,

providing exceptional customer care and delivering shareholder value have been our top priorities. This transaction will help accomplish

both," said Acreage Holdings Chairman, CEO and President Kevin Murphy. "When the right is exercised having access to

Canopy Growth's deep resources will enable us to innovate, develop and distribute quality cannabis brands across the U.S. and continue

expanding our U.S. footprint. At the same time, a confluence of factors are making it much more difficult for a multi-state operator

to achieve its full potential, including the enormous amount of cash required to scale. Our Board of Directors, management team

and I are pleased to deliver significantly increased liquidity to our shareholders and put ourselves in an even stronger position

to deliver continued and significant upside."

Once the Right is exercised, the combined infrastructure,

intellectual property, brands and organizational resources are expected to create a global cannabis powerhouse, with an anticipated

leadership position in every targeted international market for legal cannabis sales, including the U.S., Canada, and select markets

across Latin America, Europe and Asia-Pacific.

Additional Information:

Canopy Growth earned national visibility in the United

States when it listed its common shares on the New York Stock Exchange, becoming the first cannabis company to do so. Canopy Growth's

U.S. hemp operations are being established in parallel to the Acreage entrance strategy, and will include hemp cultivation, extraction,

processing, and packaging products for sale across the United States, where permissible by regulations.

Acreage is a leading multi-state operator in U.S. cannabis.

It owns or has managed services agreements in place for cannabis-related licenses across 20 states (giving it the right to develop),

including 87 dispensaries and 22 cultivation and processing sites. Its Board of Directors includes former Canadian Prime Minister

Brian Mulroney and former Speaker of the U.S. House of Representatives, John Boehner.

Upon exercising the Right, the combined operations of Acreage

and Canopy Growth would immediately create the undisputed leader in U.S. cannabis, the only relevant market where Canopy Growth

does not yet have a major presence.

According to the Arrangement, Acreage will be able to issue

up to 58,000,000 Acreage Subordinate Voting Shares (implied valuation of US$1.4 billion based on Canopy's closing share price at

the Exchange Ratio), together with a further 5,221,905 Acreage Subordinate Voting Shares in respect of certain potential acquisitions,

which if the Right is exercised shall become future Canopy Shares, which, combined with an expectation of enhanced liquidity should

further accelerate Acreage's ability to fund organic and accretive rapid expansion.

Canopy Growth and Constellation Brands, Inc. ("Constellation

Brands") - Canopy Growth's largest shareholder and Fortune 500 beverage alcohol leader - will, as part of the

Arrangement extend the terms of certain warrants and restructure other rights. See Constellation's press release dated April 18,

2019 "Constellation Brands Enters Into Agreement with Canopy Growth Corporation to Modify Warrants and Other Rights".

Acreage President, George Allen will depart the company

effectively immediately. Acreage Chairman and CEO Kevin Murphy will assume the duties of President.

The Transaction will be carried out by way

of a court-approved plan of arrangement under the Business Corporations Act (British Columbia) (the "Arrangement")

and will require the approval of shareholders of both Canopy Growth and Acreage at special meetings expected to take place in June

2019. In addition to shareholder approval, the Transaction is subject to applicable regulatory, court and stock exchange approvals

and certain other closing conditions.

Pursuant to the terms of the Transaction, the

Acreage Subordinate Voting Shares, which may be acquired securities holders of proportionate voting shares of Acreage (the "Acreage

Proportionate Voting Shares"), holders of multiple voting shares of Acreage (the "Acreage Multiple Voting Shares")

and holders of units (the "Acreage Unit Holders") in High Street Capital Partners, LLC and shares of Acreage Holdings

WC, Inc. (the "USCo2 Holders"), on conversion or exchange thereof, as applicable, will be subject to the Right and entitled

to the Up-Front Cash Premium.

Under the terms of the Agreement, Canopy Growth

will pay the Up-Front Cash Premium to the holders of Acreage Subordinate Voting Shares, Acreage Proportionate Voting Shares and

Acreage Multiple Voting Shares as well as Acreage Unit Holders and the USCo2 Holders (collectively, the "Acreage Holders").

There will be an Up-Front Cash Premium paid to the Acreage Holders based on the currently outstanding securities of Acreage.

Following the federal legalization of cannabis

in the United States (the "Triggering Event") and certain other conditions to closing, each Acreage Proportionate

Voting Share and Acreage Multiple Voting Share will automatically convert into Acreage Subordinate Voting Shares in accordance

with their terms and thereafter each Acreage Subordinate Voting Share will be automatically exchanged for Canopy Shares based on

the Exchange Ratio. On closing of the Transaction, Acreage Unit Holders will have the right to convert their units, and USCo2 Holders

will have the right to convert their shares, into Canopy Shares based on the Exchange Ratio. Acreage Unit Holders will be required

to convert into Canopy Shares three years following the closing of the Transaction. If the Triggering Event is not satisfied or

waived within 90 months from the payment of the Up-Front Cash Premium, the Agreement will terminate.

After giving effect to the Transaction, assuming

conversion of all securities of Acreage following a Triggering Event, Acreage Holders will hold approximately 12.1% ownership in

Canopy Growth (on a pro forma basis) and up to 16.6% if permitted acquisitions are completed prior to the Trigger Event. Pursuant

to the Transaction, Acreage is permitted to issue up to an additional 58,000,000 Acreage Subordinate Voting Shares (or the equivalent

number of convertible securities), together with a further 5,221,905 Acreage Subordinate Voting Shares (or the equivalent

number of convertible securities) in respect of certain potential acquisitions by Acreage .