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Acreage Holdings, Inc. – ‘PRER14A’ on 8/6/20

On:  Thursday, 8/6/20, at 2:55pm ET   ·   Accession #:  1104659-20-91359   ·   File #:  0-56021

Previous ‘PRER14A’:  None   ·   Next:  ‘PRER14A’ on 1/17/23   ·   Latest:  ‘PRER14A’ on 2/9/23   ·   15 References:   By:  Acreage Holdings, Inc. – ‘S-3/A’ on 8/21/20 To:  Acreage Holdings, Inc. – ‘8-K’ on 6/30/20 for 6/24/20 To:  Canopy Growth Corp. – ‘8-K’ on 6/30/20 for 6/24/20 To:  Acreage Holdings, Inc. – ‘10-Q’ on 6/29/20 for 3/31/20 To:  Acreage Holdings, Inc. – ‘8-K’ on / for 6/19/20 To:  Acreage Holdings, Inc. – ‘8-K’ on 6/4/20 for 5/29/20 To:  Canopy Growth Corp. – ‘10-K’ on 6/1/20 for 3/31/20 To:  Acreage Holdings, Inc. – ‘8-K’ on / for 4/22/20 To:  Acreage Holdings, Inc. – ‘8-K’ on 4/6/20 for 4/3/20 To:  Canopy Growth Corp. – ‘8-K’ on 4/2/20 for 4/1/20 To:  Acreage Holdings, Inc. – ‘8-K’ on / for 3/30/20 To:  Acreage Holdings, Inc. – ‘8-K’ on / for 3/30/20 To:  Acreage Holdings, Inc. – ‘8-K’ on 3/17/20 for 3/11/20 To:  Acreage Holdings, Inc. – ‘8-K’ on 2/21/20 for 2/14/20 To:  Acreage Holdings, Inc. – ‘8-K’ on 2/13/20 for 2/7/20 

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 8/06/20  Acreage Holdings, Inc.            PRER14A                1:3.9M                                   Toppan Merrill/FA

Document/Exhibit                   Description                      Pages   Size 

 1: PRER14A     Revised Preliminary Proxy Soliciting Material       HTML   2.18M 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934

(Amendment No. 1)

Acreage Holdings, Inc. 

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

No securities regulatory authority or stock exchange in Canada, the United States or any other jurisdiction has expressed an opinion about, or passed ‎upon the fairness or merits of, the transactions described in this document, the securities offered pursuant to such ‎transactions or the adequacy of the information contained in this document and it is an offense to claim ‎otherwise.‎

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

to be held September 16, 2020

and

PROXY STATEMENT AND MANAGEMENT INFORMATION CIRCULAR

with respect to a proposed

AMENDED PLAN OF ARRANGEMENT

involving

ACREAGE HOLDINGS, INC.,

SECURITYHOLDERS OF ACREAGE HOLDINGS, INC.

and

CANOPY GROWTH CORPORATION

August [¨], 2020

August [¨], 2020

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 holders (the “Shareholders”) of Acreage’s issued and outstanding shares to be held at 11:00 a.m. (New York time) ‎on September 16, 2020. In light of the recent coronavirus (COVID-19) outbreak and in order to address potential issues arising from the unprecedented public health impact of the novel coronavirus (COVID-19‎), comply with applicable public health directives that may be in force at the time of the Meeting‎, and to limit and mitigate risks to the health and safety of our communities, Shareholders, employees, directors and other stakeholders, the Meeting will be held in a virtual format, which will be ‎conducted via live webcast online at web.lumiagm.com/‎221798142 (password: Acreage2020‎). Shareholders will not need to, or be able to, physically attend the Meeting. Shareholders will have an ‎equal opportunity to attend, ask questions and vote at the Meeting online regardless of their geographic ‎location. Inside this document, you will find important information and instructions about how to participate ‎in the Meeting.

‎On June 24, 2020, Acreage entered into a proposal agreement with Canopy Growth Corporation (“Canopy Growth”), which sets out, among other things, the terms and conditions upon which the parties are proposing to enter into an amending agreement (the “Amending Agreement”) to amend the existing arrangement agreement between Acreage and Canopy Growth dated April 18, 2019, as amended on May 15, 2019 (the “Existing Arrangement Agreement”), amend and restate the existing plan of arrangement (the “Amended Plan of Arrangement”) and implement the Amended Plan of Arrangement pursuant to the Business ‎Corporations Act ‎‎(British Columbia) (the “Amended Arrangement”).

At the Meeting, you will be asked to consider and approve ‎a special resolution authorizing and approving (i) the Amended Arrangement, (ii) the Amending Agreement, (iii) the Amended Plan of Arrangement, and (iv) the second amended and restated equity incentive plan (the “Amended and Restated Omnibus Equity Incentive Plan”).

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.‎

Pursuant to the ‎Amended Plan of Arrangement, among other things, Canopy Growth will ‎make an aggregate cash payment of US$37,500,024 to the ‎Shareholders and ‎certain holders of securities exchangeable for ‎ Existing Shares and Acreage will complete a capital reorganization (the “Capital ‎Reorganization”) ‎whereby: (i) each Class A subordinate voting ‎share (each, an “Existing SVS”) will be exchanged for 0.7 of a ‎Class E subordinate voting ‎share (each whole share, a “Fixed Share”) and 0.3 of ‎a Class D subordinate voting share ‎‎(each whole share, a “Floating Share”); (ii) ‎each Class B proportionate voting share (each, an “Existing PVS”) will be exchanged for 28 ‎Fixed Shares and 12 Floating Shares; ‎and (iii) each Class C multiple ‎voting share (each, an “Existing MVS”, and together with the Existing SVS and Existing MVS, the “Existing Shares”) will be exchanged for 0.7 ‎of a new multiple voting ‎share (each whole share, a “Fixed Multiple Share”) and 0.3 of a ‎Floating Share. ‎Each Fixed Existing MVS ‎will be ‎entitled to 4,300 votes at all meetings of Shareholders with ‎each Fixed Share and ‎each Floating Share entitled to one vote per share at ‎such meetings.‎

As a condition to implementation of the Amended Arrangement, an affiliate of Canopy Growth (the “Lender”) will advance the first tranche of US$50,000,000 of a loan of up to US$100,000,000 (the “Loan”) to an affiliate of the Company that operates solely in the hemp industry in full compliance with all applicable laws (“Hempco”) pursuant to a secured debenture (the “Debenture”).

Pursuant to the Amended Plan of Arrangement, upon the occurrence of 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 or waiver thereof (at ‎the discretion of Canopy Growth), ‎Canopy Growth will, subject to the satisfaction or waiver of ‎certain closing conditions set out ‎in the Amended Arrangement Agreement: (i) acquire all of ‎the issued and outstanding Fixed Shares ‎‎(following the mandatory conversion of ‎the Fixed Multiple Shares into Fixed Shares) on the ‎basis of 0.3048 of a common share in the capital of Canopy Growth (a “Canopy ‎Growth Share”) for each Fixed Share ‎held at the time of ‎the acquisition of the Fixed Shares (the “Acquisition Time”), subject to ‎‎adjustment in accordance with the terms of the Amended Plan of Arrangement ‎‎(the “Canopy ‎Call Option”); and (ii) have the right (but not the obligation) (the ‎‎“Floating Call Option”), ‎exercisable for a period of 30 days following the Floating Rate Date to acquire all of the ‎issued and outstanding Floating Shares. Upon exercise of the Floating Call Option, Canopy Growth may acquire the Floating Shares for cash or for Canopy Growth Shares or a combination thereof, in Canopy Growth’s sole discretion. If paid in cash, the price per Floating Share shall be equal to the volume-weighted average trading price of the Floating Shares on the Canadian Securities Exchange (the “CSE”) (or other recognized stock exchange on which the Floating Shares are primarily traded as determined by volume) for the 30 trading day period prior to the exercise (or deemed exercise) of the Canopy Call Option, subject to a minimum amount of US$6.41. If paid in Canopy Growth Shares, each Floating Share will be exchanged for a number of Canopy Growth Shares equal to (i) the volume-weighted average trading price of the Floating Shares on the CSE (or other recognized stock exchange on which the Floating Shares are primarily traded as determined by volume) for the 30 trading day period prior to the exercise (or deemed exercise) of the Canopy Call Option, subject to a minimum amount of US$6.41, divided by (ii) the volume-weighted average trading price (expressed in US$) of the Canopy Growth Shares on the New York Stock Exchange (the “NYSE”) (or such other recognized stock exchange on which the Canopy Growth Shares are primarily traded if not then traded on the NYSE) for the 30 trading day period immediately prior to the exercise (or deemed exercise) of the Canopy Call Option (the “Floating Ratio”). The Floating Ratio is subject to adjustment in accordance with the Amended Plan of Arrangement if Acreage issues greater than the permitted number of Floating Shares prior to the Acquisition Date. No fractional Canopy Growth Shares will be issued pursuant to ‎the ‎Amended Plan of Arrangement. The Floating Call Option cannot be exercised unless the Canopy Call Option is exercised (or deemed to be exercised). The acquisition of the Floating Shares pursuant to the Floating Call Option, if exercised, will take place concurrently with the closing of the acquisition of the Fixed Shares pursuant to the Canopy Call Option. It is proposed that the Canopy Call Option and the Floating Call Option will expire 10 years from the Amendment Time. There can be no guarantee as to the value of a Canopy Growth Share at the Acquisition Time.

The Special Committee and the Acreage Board considered a number of factors including, among others, the following:

For additional information with respect to these and other ‎anticipated benefits of the Amended Arrangement, see the section in the proxy statement and management information circular accompanying this letter (the “Circular”) entitled “The Amended Arrangement – Reasons for the ‎Amended Arrangement”.‎

The special resolution approving the Amended Arrangement, the Amending Agreement, the Amended Plan of Arrangement and the Amended and Restated Omnibus Equity Incentive Plan‎ (the “Amendment Resolution”) must be approved by at least 66⅔% of ‎the votes cast at the Meeting by the holders of Existing Shares, voting together as a single class. In addition, the ‎Amendment Resolution is subject to approval by a simple majority of votes cast by the holders of Existing SVS and Existing PVS, present virtually or represented by proxy and entitled to vote at the Meeting, voting together as a single class‎, excluding the votes in respect of Existing Shares which are owned, held, controlled or directed by Mr. Kevin Murphy. The Amendment ‎Resolution is also subject to the approval of a simple majority of the votes cast by the holders of outstanding Existing SVS, Existing PVS and Existing MVS, voting together as a single class, excluding the votes in respect of Existing Shares which are owned, held, controlled or directed by Mr. Murphy. Abstentions and broker non-votes will not have any effect on the approval of the Amendment Resolution.

Eight Capital ‎has delivered an opinion to the special committee of the Acreage Board (the ‎‎“Special Committee”), which states that, as of the date thereof, and subject to the assumptions, ‎qualifications and limitations set out therein, the consideration to be ‎received by the Shareholders pursuant to the Amended Arrangement is fair, from a financial point of view, to the Shareholders ‎‎(the “New Fairness Opinion”).

‎

After consulting with Acreage management and receiving advice and assistance of its financial and legal advisors, and after careful consideration of a number of alternatives and factors, including, among others, receipt of the unanimous recommendation from the Special Committee, the New Fairness Opinion and the factors set out in the Circular under the heading “Reasons for the Amended Arrangement”, the members of the Acreage Board unanimously (with the exception of Mr. Murphy, who declared his interest in the transactions contemplated by the Proposal Agreement and the Amending Agreement and abstained from voting in respect thereof) determined that the Amended Arrangement and entry into the Proposal Agreement are in the best interests of Acreage ‎and are fair to Shareholders and recommend that Shareholders vote FOR the Amendment Resolution. The accompanying Circular describes the background to the Acreage Board’s‎ determinations and recommendations.

The accompanying Circular contains a detailed description of the Amended Arrangement‎ and includes other information to assist you in considering the matters to be voted upon which we encourage you to carefully consider. If you require assistance, you should consult your financial, tax, legal and other professional advisors.

Your vote is important regardless of the number of Existing 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 Existing Shares are voted at the Meeting in ‎accordance with your instructions. If you are a non-registered Shareholder and hold your Existing Shares through a ‎broker, custodian, nominee or other intermediary, please follow their instructions.

‎Please vote as soon as possible.

While certain matters, such as the timing of the receipt of court approval and the satisfaction of certain other ‎conditions, are beyond Acreage’s control, if the requisite approvals are obtained from Shareholders, it is ‎anticipated that the Amended Arrangement will be completed in September of 2020.

Enclosed is a letter of transmittal for registered Shareholders explaining how you can deposit your Existing Shares and obtain the Fixed Shares and Floating Shares in exchange therefor in connection with the Capital Reorganization. The letter of transmittal will also be available on the Company’s website at [] as well as on SEDAR at www.sedar.com, on EDGAR at www.sec.gov/edgar or by contacting Odyssey Trust Company (using the information set out on the back of the accompanying Circular).

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 1-877-657-5856 toll-‎free in North America (+1-416-867-2272 collect) or by e-mail at contactus@kingsdaleadvisors.com‎.

‎

On behalf of Acreage, I would like to thank all Shareholders for your ongoing support.

‎

Sincerely,

“William C. Van Faasen”

William C. Van Faasen

Interim Chief Executive Officer

Acreage Holdings, Inc.

NOTICE OF MEETING

NOTICE IS HEREBY GIVEN that a special meeting (the “Meeting”) of the holders (the “Existing SVS ‎Shareholders”) of Class A subordinate voting shares (the “Existing SVS”), the holders (the ‎‎“Existing PVS Shareholders”) of Class B proportionate voting shares (the “Existing PVS”) and ‎the holders (the “Existing MVS Shareholders” and, together with the Existing SVS Shareholders and the Proportionate ‎Shareholders, the “Shareholders”) of Class C multiple voting shares (the “Existing MVS”, and together ‎with the Existing SVS and the Existing PVS, the “Existing Shares”) of Acreage ‎Holdings, Inc. (“Acreage” or the “Company”) will be held on September 16, 2020 at 11:00 a.m. (New York time) for the following ‎purposes: ‎

The Circular provides additional information relating to the matters to be addressed at the Meeting, including the Amended Arrangement‎.

The full text of the Amended Plan of Arrangement, the Amending Agreement and the Amendment Interim Order are attached to the Circular as Appendix “C”, Appendix “B” and Appendix “E”, respectively.

Additional information relating to the matters to be brought before the Meeting is set forth in the Circular which accompanies this Notice.

The Company’s board of directors (the “Acreage Board”) unanimously (with the exception of Mr. Murphy, who declared his interest in the transactions contemplated by the Proposal Agreement and the Amending Agreement and abstained from voting in respect thereof) recommends that Shareholders vote FOR the Amendment Resolution. It is a condition of the execution of the Amended Arrangement Agreement and the implementation of the Amended Arrangement that the Amendment Resolution is adopted at the Meeting.

The Acreage Board fixed August 13, 2020, as the record date for the Meeting (the “Record Date”). Shareholders of record at the close of business on the Record Date are entitled to notice of the Meeting and to vote thereat or at any adjournment or postponement thereof on the basis of: (i) one vote for each Existing SVS held; (ii) 40 votes for each Existing PVS held; and (iii) 3,000 votes for each Existing MVS held. To be adopted, the Amendment Resolution must be approved by: (i) at least 66⅔% of the votes cast by Shareholders, present virtually or represented by proxy and entitled to vote at the Meeting, voting together as a single class; (ii) in accordance with Multilateral Instrument 61-101 – Protection of Minority Securityholders in Special Transactions (“MI 61-101”), a simple majority of votes cast by the holders of Existing SVS and Existing PVS, present virtually or represented by proxy and entitled to vote at the Meeting, voting together as a single class‎, excluding the votes cast by any “interested party”, any “related party” of an “interested party” or any “joint actor” (as such terms are defined in MI 61-101) (the “Interested Parties”); and (iii) in accordance with Ontario Securities Commission Rule 56-501 (“OSC Rule 56-501”) and National Instrument 41-101 – General Prospectus Requirements (“NI 41-101”), a simple majority of the votes cast by the holders of Existing SVS, Existing PVS and Existing MVS, present virtually or represented by proxy and entitled to vote at the Meeting, voting together as a single class, excluding the votes cast by any affiliates of the Company and securities held directly or indirectly by control persons of the Company (the “Related Parties”). Abstentions and broker non-votes will not have any effect on the approval of the Amendment Resolution. Since all of the holders of Existing MVS are ‎Interested Parties, the votes with respect to all of the Existing MVS will not be considered for purposes of ‎determining whether “minority approval” has been obtained pursuant to MI 61-101. ‎The votes attaching to the Existing SVS and ‎Existing PVS held by the Interested Parties will also be excluded for the purposes of determining ‎whether “minority approval” has been obtained for the purposes of MI 61-101.‎ In addition, since Mr. Murphy, the sole holder of Existing MVS, is ‎a Related Party, the votes with respect to all of the Existing MVS will not be considered for purposes of ‎determining whether “minority approval” has been obtained pursuant to OSC Rule 56-501 and NI 41-101. ‎The votes attaching to the Existing SVS and ‎Existing PVS held by the Related Parties will also be excluded for the purposes of determining ‎whether “minority approval” has been obtained for the purposes of OSC Rule 56-501 and NI 41-101.

Meeting Format

The Company is holding the Meeting as a virtual meeting, which will be conducted via live webcast. Shareholders will not be able to attend the Meeting in person.

To address potential issues arising from the unprecedented public health impact of the novel coronavirus (COVID-19), comply with applicable public health directives that may be in force at the time of the Meeting‎, and to limit and mitigate risks to the health and safety of our communities, Shareholders, employees, directors and other stakeholders, we will be holding the Meeting in a virtual only format. Shareholders will not need to, or be able to, physically attend the Meeting. Registered Shareholders and duly appointed proxyholders are entitled to vote at the Meeting either by attending virtually or by submitting a form of proxy, as described in the Circular under the headings, “General Proxy Information” and “How to Vote Your Shares”.

In order to attend, participate in or vote at ‎the Meeting (including for voting and asking questions at the Meeting), Registered Shareholders and duly appointed proxyholders must have a valid ‎username. Guests are welcome to attend and view the webcast, but will be unable to participate in or vote at the ‎Meeting. To join as a guest please visit the Meeting online at web.lumiagm.com/‎221798142 and select “Join as a Guest” ‎when prompted.

Non-Registered Shareholders (being beneficial Shareholders who hold their Existing Shares through a broker, investment dealer, bank, trust company, custodian, nominee or other intermediary) who have not duly appointed themselves as proxyholder will be able to attend the Meeting as a guest and view the webcast but will not be able to participate in or vote at the Meeting. Registered Shareholders may attend, participate in and vote at the Meeting or may be represented by proxy. Registered Shareholders and duly appointed proxyholders will be to access the Meeting at web.lumiagm.com/‎221798142. Registered Shareholders may enter the Meeting by clicking ‎‎“I have a login” and entering a username and password before the start of the Meeting.

Registered Shareholders: The control number located on the form of proxy is the username. The password for the Meeting is “Acreage2020” (case sensitive). If as a Registered Shareholder you use your control number to access the Meeting and you accept the terms and conditions, you will be revoking any and all previously submitted proxies for the Meeting and will be provided with the opportunity to vote by online ballot on the matters put forth at the Meeting. If you do not wish to revoke a previously submitted proxy, you will not be able to participate at the Meeting online and can only attend the meeting as a guest.

Duly appointed proxyholders: Shareholders who wish to appoint a third -party proxyholder to represent them at the Meeting (including Non-Registered Shareholders who have appointed themselves as proxyholder to attend, participate in or vote at the Meeting) MUST submit their duly completed proxy or voting instruction form, as applicable, AND register the proxyholder in advance of the proxy cut-off at 11:00 a.m. (New York time) on September 14, 2020. Following registration of a proxyholder, Odyssey Trust Company will provide duly appointed proxyholders with a username by e-mail after the voting deadline has passed. The password for the Meeting is “Acreage2020” (case sensitive). Non-Registered Shareholders who have not duly appointed themselves as proxyholder will be able to attend the Meeting as a guest but will not be able to participate in or vote at the Meeting.

If you are a Registered Shareholder and are unable to attend the Meeting virtually, please exercise your right to vote by completing, signing, dating and returning the applicable accompanying form of proxy to Odyssey Trust Company, the transfer agent of the Company as soon as possible, so that as large a representation as possible may be had at the Meeting. To be valid, completed proxy forms must be signed, dated and deposited with Odyssey Trust Company using one of the following methods:

Proxies must be deposited with Odyssey Trust Company not later than 11:00 a.m. (New York time) on September 14, 2020, or, if the Meeting is adjourned or postponed, not later than 48 hours, excluding Saturdays, Sundays and holidays, preceding the time of such reconvened Meeting or any adjournment or postponement thereof. The Chair of the Meeting shall have the discretion to waive or extend the proxy deadlines without notice.

If you are unable to attend the Meeting, we encourage you to complete and return the enclosed form of proxy as soon as possible so that as large a representation as possible may be had at the Meeting. If a Shareholder receives more than one form of proxy because such holder owns Existing Shares of different classes and/or registered in different names or addresses, each form of proxy must be completed and returned in order to ensure all Existing Shares are voted.

Registered Shareholders have the right to dissent with respect to the Amendment Resolution and, if the Amendment Resolution is adopted, to be paid the fair value of their Existing Shares in accordance with the provisions of the BCBCA as modified by the Amended Plan of Arrangement, the Amendment Interim Order and the final order of the Court approving the Amended Plan of Arrangement (the “Amendment Final Order”), as described in the accompanying Circular under the heading “Dissent Rights”. Failure to strictly comply with the requirements with respect to the dissent rights set forth in the BCBCA, as modified by the Amended Plan of Arrangement, the Amendment Interim Order and the Amendment Final Order may result in the loss of any right to dissent. Persons who are beneficial owners of Existing Shares registered in the name of a broker, custodian, nominee or other intermediary and who wish to dissent must make arrangements for the Existing Shares beneficially owned by them to be registered in their name prior to the time the written objection to the Amendment Resolution is required to be received by the Company or, alternatively, make arrangements for the registered holder of such Existing Shares to dissent on their behalf.

If you are a Registered Shareholder and receive these materials through your broker or through another intermediary, please complete and return the form of proxy in accordance with the instructions provided to you by your broker or other intermediary, as applicable.

Enclosed is a letter of transmittal for registered Shareholders explaining how you can deposit your Existing ‎Shares and obtain the Fixed Shares and Floating Shares in exchange therefor in connection with the Capital ‎Reorganization. The letter of transmittal will also be available on the Company’s website at [¨] as well as on ‎SEDAR at www.sedar.com, on EDGAR at www.sec.gov/edgar or by contacting Odyssey Trust Company (using ‎the information set out on the back of the accompanying Circular).

‎

If you have any questions or require assistance, please contact Kingsdale Advisors, our strategic shareholder advisor and proxy ‎solicitation agent, by telephone at 1-877-657-5856 toll-‎free in North America (+1-416-867-2272 collect calls outside of North America) or by e-mail at contactus@kingsdaleadvisors.com, or your ‎professional advisor.

DATED at New York, New York this [¨] day of August, 2020.

BY ORDER OF THE BOARD OF DIRECTORS

QUESTIONS AND ANSWERS ABOUT THE AMENDED ARRANGEMENT, THE POTENTIAL ACQUISITION AND THE MEETING

The information contained below is of a summary nature and therefore is not complete. This summary information is qualified in its entirety by the more detailed information contained elsewhere in or incorporated by reference into this Circular, including the Appendices hereto, the form of proxy, and the Capital Reorganization Letter of Transmittal, each of which are important and should be reviewed carefully. Capitalized terms used in these questions and answers but not otherwise defined herein have the meanings set forth in the “Glossary of Terms” in this Circular. See “Cautionary Note Regarding Forward-Looking Information” and “Risk Factors”.

Q&A ON THE AMENDED ARRANGEMENT

General

Q: What are the Shareholders being asked to vote on?

A: Shareholders are being asked to vote on a special resolution to, among other things, approve: (i) the Amended Arrangement; (ii) the Amending Agreement; (iii) the Amended Plan of Arrangement to terminate the Existing Canopy Option and provide for the Canopy Call Option and the Floating Call Option; and (iv) the Amended and Restated Omnibus Equity Incentive Plan.

See “The Amended ‎Arrangement – Required Shareholder Approvals”.

Q: What changes are being proposed to the Existing Canopy Option?

A: Under the Existing Arrangement, upon the occurrence or waiver (at the discretion of Canopy Growth) of the Triggering Event, Canopy Growth will, subject to the satisfaction or waiver of the Acquisition Closing Conditions, acquire all of the ‎issued and outstanding Existing SVS (after each Existing MVS and Existing PVS is converted into an Existing SVS) in exchange for 0.5818 of a ‎Canopy Growth Share for each Existing SVS‎, subject to adjustment in certain circumstances as set out in the Arrangement Agreement.

As described in greater detail below, the Amended Plan of Arrangement will include, the Capital Reorganization pursuant to which, among other things (i) each outstanding Existing SVS will be exchanged for 0.7 of a Fixed Share and 0.3 of ‎a Floating Share; (ii) ‎each outstanding Existing PVS will be exchanged for 28 ‎Fixed Shares and 12 Floating Shares; ‎and (iii) each outstanding Existing MVS will be exchanged for 0.7 ‎of a Fixed Multiple Share and 0.3 of a ‎Floating Share. Under the Amended Arrangement, upon the occurrence or waiver (at the discretion of Canopy Growth) of the Triggering Event, Canopy Growth will exercise (or be deemed to exercise) the Canopy Call Option and subject to the satisfaction or waiver of the Acquisition Closing Conditions, Canopy Growth will (i) acquire all of ‎the issued and outstanding Fixed Shares ‎‎(following the mandatory conversion of ‎the Fixed Multiple Shares into Fixed Shares) on the ‎basis of the Exchange Ratio ‎for each Fixed Share held at the Acquisition Time; and (ii) have the right (but not the obligation) exercisable for a period of 30 days following the Floating Rate Date, to exercise the ‎‎Floating Call Option to acquire all of the ‎issued and outstanding Floating Shares. The Existing Canopy Option expires on December 27, 2026. Under the Amended Arrangement, the Canopy Call Option will expire 10 years from the Amendment Time.

If Canopy Growth exercises the Floating Call Option, it may acquire the Floating Shares for cash or Canopy Growth Shares or a combination thereof, in Canopy Growth’s sole discretion. If paid in cash, the price per Floating Share shall be equal to the volume-weighted average trading price of the Floating Shares on the CSE (or other recognized stock exchange on which the Floating Shares are primarily traded as determined by volume) for the 30 trading day period prior to the exercise (or deemed exercise) of the Canopy Call Option, subject to a minimum amount of US$6.41. If paid in Canopy Growth Shares, each Fixed Share will be exchanged for a number of Canopy Growth Shares equal to (i) the volume-weighted average trading price of the Floating Shares on the CSE (or other recognized stock exchange on which the Floating Shares are primarily traded as determined by volume) for the 30 trading day period prior to the exercise (or deemed exercise) of the Canopy Call Option, subject to a minimum amount of US$6.41, divided by (ii) the volume-weighted average trading price (expressed in US$) of the Canopy Growth Shares on the NYSE (or such other recognized stock exchange on which the Canopy Growth Shares are primarily traded if not then traded on the NYSE) for the 30 trading day period immediately prior to the exercise (or deemed exercise) of the Canopy Call Option.

See “The Amended Arrangement – Principal Steps of the Amended Arrangement”.‎

Q: What will I receive for my Shares upon implementation of the Amended Plan of Arrangement?

A: If implemented, at the Amendment ‎Time, Canopy ‎Growth will pay the Aggregate Amendment Option Payment of US$37,500,024 on a pro rata basis to each ‎Shareholder, High Street Holder and USCo2 Holder and each of the holders thereof will be entitled to receive approximately $[¨] per Existing SVS (assuming the conversion or exchange of such Eligible Securities for Existing SVS) based on the number of outstanding Existing Shares as of the date hereof. In addition, among other things, the Company will complete the Capital Reorganization whereby, (i) each outstanding Existing SVS will be exchanged for 0.7 of a Fixed Share and 0.3 of ‎a Floating Share; (ii) ‎each outstanding Existing PVS will be exchanged for 28 ‎Fixed Shares and 12 Floating Shares; ‎and (iii) each outstanding Existing MVS will be exchanged for 0.7 ‎of a Fixed Multiple Share and 0.3 of a ‎Floating Share. No fractional Fixed Shares, Fixed Multiple Shares or Floating Shares will be ‎‎issued pursuant to the Capital Reorganization. Each Fixed Multiple Share ‎will be ‎entitled to 4,300 votes at all meetings of Shareholders and ‎each Fixed Share and ‎each Floating Share will be entitled to one vote per share at ‎such meetings.‎

See “The Amended Arrangement – Principal Steps of the Amended Arrangement”, “Transaction Agreements – Amending Agreement – Amended Plan of Arrangement” and “Procedures For Payment Of Aggregate Amendment Option Payment And Canopy Growth ‎Consideration – Treatment of Fractional Consideration”.‎

Q: What will I receive for my Fixed Shares upon exercise (or deemed exercise) of the Canopy Call Option?

A: Under the Amended Arrangement, upon the occurrence or waiver (at the discretion of Canopy Growth) of the Triggering Event, Canopy Growth will exercise (or be deemed to exercise) the Canopy Call Option and subject to the satisfaction or waiver of the Acquisition Closing Conditions, Canopy Growth will acquire all of ‎the issued and outstanding Fixed Shares ‎‎(following the mandatory conversion of ‎the Fixed Multiple Shares into Fixed Shares) in exchange for 0.3048 of a Canopy ‎Growth Share for each Fixed Share ‎held at the Acquisition Time, subject to ‎adjustment in accordance with the terms of ‎the Amended Arrangement, ‎for each Fixed Share held at the Acquisition Time.

See “The Amended Arrangement – Principal Steps of the Amended Arrangement”, “The Amended Arrangement – Description of the Amended Arrangement” “Transaction Agreements – Amending Agreement – Amended Plan of Arrangement”, and “Procedures For Payment Of Aggregate Amendment Option Payment And Canopy Growth ‎Consideration – Treatment of Fractional Consideration”.‎

Q: What will I receive for my Floating Shares if Canopy Growth exercises the Floating Call Option?

A: Upon the occurrence or waiver (at the discretion of Canopy Growth) of the Triggering Event, Canopy Growth ‎will exercise (or be deemed to exercise) the Canopy Call Option and subject to the satisfaction or waiver of ‎the Acquisition Closing Conditions, Canopy Growth will have the right (but not the obligation) exercisable for ‎a period of 30 days following the Floating Rate Date, to exercise the ‎‎Floating Call Option to acquire all of the ‎‎issued and outstanding Floating Shares‎.

Canopy Growth may acquire the Floating Shares for cash or Canopy Growth Shares or a combination thereof, in Canopy Growth’s sole discretion. If paid in cash, the price per Floating Share shall be equal to the volume-weighted average trading price of the Floating Shares on the CSE (or other recognized stock exchange on which the Floating Shares are primarily traded as determined by volume) for the 30 trading day period prior to the exercise (or deemed exercise) of the Canopy Call Option, subject to a minimum amount of US$6.41. If paid in Canopy Growth Shares, each Fixed Share will be exchanged for a number of Canopy Growth Shares equal to (i) the volume-weighted average trading price of the Floating Shares on the CSE (or other recognized stock exchange on which the Floating Shares are primarily traded as determined by volume) for the 30 trading day period prior to the exercise (or deemed exercise) of the Canopy Call Option, subject to a minimum amount of US$6.41, divided by (ii) the volume-weighted average trading price (expressed in US$) of the Canopy Growth Shares on the NYSE (or such other recognized stock exchange on which the Canopy Growth Shares are primarily traded if not then traded on the NYSE) for the 30 trading day period immediately prior to the exercise (or deemed exercise) of the Canopy Call Option. The foregoing Floating Ratio is subject to adjustment in accordance with the Amended Plan of Arrangement if Acreage issues greater than the permitted number of Floating Shares prior to the Acquisition Date. No fractional Canopy Growth Shares will be issued pursuant to ‎the ‎Amended Plan of Arrangement. The Floating Call Option cannot be exercised unless the Canopy Call Option is exercised (or deemed to be exercised). The acquisition of the Floating Shares pursuant to the Floating Call Option, if exercised, will take place concurrently with the closing of the acquisition of the Fixed Shares pursuant to the Canopy Call Option.

At the time of the Meeting, Shareholders will not know whether or not the Floating Call Option will be exercised by Canopy Growth and, if exercised, whether Shareholders will receive cash, Canopy Growth Shares or a combination thereof in consideration for their Floating Shares. In addition, at the time of the Meeting, Shareholders will not know the value to be received in exchange for their Floating Shares, assuming that the Floating Call Option is exercised, as the Floating Ratio is based upon the future value of the Floating Shares, determined as of the date of the occurrence or waiver (at the discretion of Canopy Growth) of the Triggering Event. Within 30 days of the exercise (or deemed exercise) of the Canopy Call Option, Canopy Growth must decide whether or not to exercise the Floating Call Option and publicly announce whether the consideration for the Floating Shares will be comprised of cash, Canopy Growth Shares or a combination thereof.

See “The Amended Arrangement – Description of the Amended Arrangement”, “The Amended Arrangement – Principal Steps of the Amended Arrangement” and “Transaction Agreements – Amending Agreement - Amended Plan of Arrangement”.‎

Q: What will happen to my Acreage Options, Acreage Compensation Options and Acreage RSUs pursuant to the Amended Plan of Arrangement?

A: At the Amendment Time, on the terms and subject to the conditions of the Amended Plan of ‎‎Arrangement, each Acreage Option, Acreage RSU and Acreage Compensation Option that is outstanding immediately prior to the Amendment Time, will be ‎exchanged for a Fixed Share Replacement Security to acquire 0.7 of a Fixed Share and a Floating Share ‎Replacement Security to acquire 0.3 of a Floating Share in order to account for ‎the Capital Reorganization.‎ The exercise price payable in respect of the Fixed Share Replacement Securities and Floating Share ‎Replacement Securities will be multiplied by 0.7 or 0.3, as applicable, to reflect the Capital Reorganization‎.

At the Acquisition Time, on the terms and subject to the conditions of the Amended ‎Plan of ‎Arrangement, each Fixed Share Replacement Security will be exchanged for ‎a Replacement ‎Option, Replacement RSUs or Replacement Compensation Options, as ‎applicable, to acquire from ‎Canopy Growth such number of Canopy Growth Shares ‎as is equal to: (i) the number of ‎Fixed Shares that were issuable upon exercise of ‎such Fixed Share Replacement Security ‎immediately prior to the Acquisition Time, ‎multiplied by (ii) the Exchange Ratio in effect ‎immediately prior to the Acquisition ‎Time (provided that if the foregoing would result in the ‎issuance of a fraction of a ‎Canopy Growth Share, then the number of Canopy Growth Shares ‎to be issued will ‎be rounded down to the nearest whole number).‎

If the Floating Call Option is exercised and Canopy Growth acquires ‎the ‎Floating Shares at the Acquisition Time, on the terms and subject to the ‎conditions of the ‎Amended Plan of Arrangement, each Floating Share Replacement ‎Security will be exchanged ‎for a Replacement ‎Option, Replacement RSUs or Replacement Compensation Options, as applicable, ‎to acquire from Canopy Growth ‎such number of Canopy Growth Shares as is equal to: (i) the ‎number of Floating ‎Shares that were issuable upon exercise of such Floating Share ‎Replacement ‎Security immediately prior to the Acquisition Time, multiplied by (ii) the ‎Floating ‎Ratio (provided that if the foregoing would result in the issuance of a fraction of a ‎‎Canopy Growth Share, then the number of Canopy Growth Shares to be issued will ‎be ‎rounded down to the nearest whole number).‎

See “The Amended Arrangement – Principal Steps of the Amended Arrangement”.

Q: What will happen to my High Street Units and USCo2 Shares that are currently convertible or ‎exchangeable into Existing SVS pursuant to the Amended Plan of Arrangement‎?

A: In order to reflect the Capital Reorganization, following the Amendment Time, all High Street Units and USCo2 Shares will be exercisable, convertible or exchangeable on the basis of 0.7 of a Fixed Share and 0.3 of a Floating Share in respect of each Existing SVS that otherwise would have been issuable upon such exercise, conversion or exchange.

If the Canopy Call Option and the Floating Call Option are exercised, following the Acquisition Time, all High Street Units and USCo2 Shares will be exercisable, convertible or exchangeable for Canopy Growth Shares on the basis of the Exchange Ratio and the Floating Ratio.

See “The Amended Arrangement – Treatment of High Street Holders and USCo2 Holders” and “Securities Law Matters – U.S. Securities Laws – Exemption from U.S. Registration”.

Q: What are the consequences of the Amending Agreement becoming effective at the Amendment Time?

A: If the Amendment Resolution is adopted and the Amending Agreement is executed, the Amending Agreement will provide for, among other things: (i) the ‎‎implementation of the Amended Plan of Arrangement; and (ii) amendments to the ‎definition ‎of Canopy Growth Approved Share Threshold (being the maximum number of Shares that may be issued without the consent of Canopy Growth and without reducing the Exchange Ratio) to ‎reduce the number of shares of the Company available to be issued ‎by the Company such that, following ‎the Amendment Time, the Company may ‎issue a maximum of 32,700,000 shares ‎‎(or convertible securities in proportion to the ‎foregoing), which will include (a) ‎‎3,700,000 Option ‎‎Shares; (b) 8,700,000 Floating Shares other than the Option Shares; and (c) ‎‎20,300,000 ‎Fixed Shares. Notwithstanding the foregoing, the Amending Agreement ‎provides that the Company ‎may not issue any equity securities, without Canopy ‎Growth’s prior consent, other than: (i) ‎upon the exercise or conversion of ‎convertible securities outstanding as of the Amendment ‎Date; (ii) contractual ‎commitments existing as of the Amendment Date; (iii) the Option ‎Shares; (iv) the ‎issuance of up to US$3,000,000 worth of Fixed Shares pursuant to an at-the-‎market ‎offering to be completed no more than four times during any one-year period; (v) ‎the ‎issuance of up to 500,000 Fixed Shares in connection with debt financing ‎transactions that ‎are otherwise in compliance with the terms of the Arrangement ‎Agreement, as amended by ‎the Amending Agreement; or (vi) pursuant to one ‎private placement or public offering of ‎securities during any one-year period for ‎aggregate gross proceeds of up to US$20,000,000, ‎subject to specific limitations as ‎set out in the Amending Agreement.‎

In addition, the Amending Agreement will provide for, among other things: (i) ‎various ‎Canopy Growth rights that extend beyond the Acquisition Date and ‎continue until the End Date, including, among ‎others, rights to nominate a majority of the Acreage ‎Board following the Acquisition ‎Time, rights to designate all replacement officers, following the resignation or termination, as applicable, of the officers following the Acquisition Time, restrictions on the Company’s ability to incur certain ‎indebtedness without ‎Canopy Growth’s consent; (ii) restrictive covenants in respect of the ‎business ‎conduct in favor of Canopy Growth; (iii) termination of non-competition and ‎‎exclusivity rights granted to the Company by Canopy Growth in the Arrangement ‎Agreement in ‎the event that the Company does not meet certain specified financial ‎targets on an annual basis ‎during the term of the Canopy Call Option as further ‎described below; (iv) implementation of ‎further restrictions on the Company’s ‎ability to operate its business, including its ability to hire ‎certain employees or make ‎certain payments or incur any non-trade-payable debt without ‎Canopy Growth’s ‎consent in the event that the Company does not meet certain specified financial ‎‎targets on a quarterly basis during the term of the Canopy Call Option as further ‎described ‎below; (v) a specified set of criteria that each new director and officer, as applicable, is required to meet, unless the consent of Canopy Growth is obtained; and (vi) termination of the Arrangement Agreement and Canopy ‎Growth’s obligation ‎to complete the acquisition of the Fixed Shares pursuant to the ‎Canopy Call Option in the ‎event that the Company does not meet certain specified ‎financial targets in the trailing 12 month ‎period as further described below.

See “Transaction Agreements – Amending Agreement”.‎

Q: What happens if Acreage does not meet or exceed the targets related to the Initial Business Plan?

A: In the event that Acreage has not satisfied: ‎‎(i) 90% of the Pro-Forma Net Revenue Target or the Consolidated ‎Adj. EBITDA Target set forth in the Initial Business Plan, measured on a quarterly basis, an Interim Failure to ‎Perform will occur and the Austerity Measures shall become applicable and provide significant restrictions on ‎Acreage’s ability to take certain actions otherwise permitted by the Amended Arrangement Agreement; (ii) ‎‎ 80% ‎of the Pro-Forma Net Revenue Target or the Consolidated Adj. EBITDA Target set forth in the ‎Initial Business ‎Plan, ‎as determined on an annual basis (commencing in respect of the fiscal year ending December 31, 2021), a ‎Material Failure to Perform will occur and (a) certain restrictive covenants ‎applicable to Canopy ‎Growth under the ‎Amended Arrangement Agreement will cease to apply in order ‎to permit ‎Canopy Growth to acquire, or ‎conditionally acquire, a competitor of the Company ‎in the ‎United States should it wish to do so, and (b) an event of default under the Debenture will likely occur resulting in the Loan becoming immediately due and payable; and ‎‎(iii) 60% of the Pro-Forma Net Revenue Target or the Consolidated Adj. EBITDA Target set forth in the ‎Initial ‎Business Plan for the trailing 12 month ‎period ending on the date that is 30 days prior ‎to the proposed Acquisition Time, a Failure to Perform shall occur and a ‎material adverse impact will be deemed to have occurred ‎for ‎purposes of Section ‎‎6.2(2)(h) of the Arrangement Agreement and Canopy Growth will ‎not be required ‎to complete ‎the Acquisition of the Fixed Shares pursuant to the Canopy Call ‎Option‎. ‎‎

See “Transaction Agreements - Amending Agreement - Covenants Regarding Acreage’s Business Plans”, “Business Plan Requirements” and “Risk Factors”.

Q: What assumptions used to formulate the Initial Business Plan are most likely to cause a Failure to Perform, a Material Failure to Perform and/or an Interim Failure to Perform to occur?

A: The Initial Business Plan was prepared based on the current expectations of management and the Acreage Board with respect to the anticipated results of Acreage’s business for each of the fiscal years ending December 31, 2020 through December 31, 2029, which management and the Acreage Board believe are based on reasonable assumptions as of the date hereof. There can be no certainty that the assumptions underlying the Consolidated Adj. EBITDA Targets or the Pro-Forma Net Revenue Targets set out in the Initial Business Plan will prove to be accurate and the results of Acreage may deviate from the expectations of management and the Acreage Board described under the heading “Business Plan Requirements” in this Circular. These risks to achieving the targets set out in the Initial Business Plan include, among others, adverse regulatory changes in the Identified States, the failure to adequately raise the capital necessary to operate Acreage’s business, the inability to attract and retain appropriate employees and those other items identified under the heading “Risk Factors”. If Acreage does not meet the targets in the Initial Business Plan, there may be an Interim Failure to Perform, a Material Failure to Perform and, depending on when the Canopy Call Option is exercised, a Failure to Perform may occur.

See “Risk Factors”.

Q: If the Austerity Measures are implemented at any point in time, what implications would the Austerity Measures have for Acreage’s business and Acreage’s ability to avoid a Material Failure to Perform or a Failure to Perform?

A: In the event of an Interim Failure to Perform and the imposition of the Austerity Measures, the likelihood that, absent Canopy Growth’s consent to facilitate Acreage taking actions necessary to alleviate such Interim Failure to Perform, there will be a Material Failure to Perform and, if the Canopy Call Option is exercised, a Failure to Perform would be increased. Accordingly, the requirement of Canopy Growth to complete the Acquisition pursuant to the Canopy Call Option may be jeopardized; however, Canopy Growth would have the option, in its sole discretion, to waive such rights and complete the Acquisition notwithstanding any such Failure to Perform.

Q: When will the Amendment Time occur?

A: Subject to obtaining the Amendment Final Order as well as the satisfaction of all other conditions precedent set out in the Proposal Agreement, it is anticipated that the Amendment Time will occur in September, 2020. The Acquisition forming part of the Amended Arrangement will be completed upon occurrence or waiver (at the discretion of Canopy Growth) of the Triggering Event (at the discretion of Canopy Growth), subject to the satisfaction or waiver of the Acquisition Closing Conditions as described in the Circular.

See “Transaction Agreements - The Proposal Agreement - Conditions for Implementation of the Amended Arrangement” and “Transaction Agreements - Amending Agreement”.

Q: What will happen if the Amendment Resolution is not adopted or the Amended Arrangement is not implemented for any reason?

A: If the Amendment Resolution is not approved, the Proposal Agreement will terminate and cease to be effective and the Existing Arrangement, including the terms of the Existing Canopy Option, will remain in place, the Capital Reorganization will not be completed, the proposed amendments to the Arrangement Agreement will not be effective, the Debenture will not be entered into and the Initial Advance will not be made to Hempco. Canopy Growth will continue to be required to acquire the Existing SVS in accordance with the Existing Canopy Option upon the occurrence or waiver (at the discretion of Canopy Growth) of the Triggering Event and the satisfaction or waiver of the Acquisition Closing Conditions. In addition, the A&R License will continue to govern the relationship between the parties thereto. If the Acreage Board makes a Change in Recommendation, the Amendment Resolution is not approved and the Proposal Agreement is subsequently terminated, Acreage will be required to pay the Termination Expense Reimbursement to ‎Canopy Growth in the amount of ‎US$3,000,000; provided, ‎however, that Acreage will not be required to make ‎such payment if the Change in ‎Recommendation was the result of a Purchaser ‎Material Adverse Effect (as defined in the Arrangement Agreement). See “Risk Factors - Risks if the Amended Arrangement is Not Approved and the Existing Arrangement Remains in Effect”, “Transaction Agreements - The Proposal Agreement – Termination of Proposal Agreement” and “Transaction Agreements - The Proposal Agreement – Termination of Proposal Agreement – Expenses of the Amended Arrangement - Termination Expense Reimbursement.”‎

Q: When is Canopy Growth expected to exercise the Canopy Call Option?

A: If the Amendment Resolution is adopted and the Amending Agreement is executed, the Existing Canopy Option expires on December 27, 2026. Under the Amended Arrangement, the Canopy Call Option expires 10 years from the Amendment Time. Canopy Growth is contractually obligated to exercise the Canopy Call Option upon the occurrence or waiver (at the discretion of Canopy Growth) of the Triggering Event; provided that the acquisition of the Fixed Shares is subject to the satisfaction or waiver of the Acquisition Closing Conditions. Canopy Growth may, in its sole discretion, elect to exercise the Floating Call Option within 30 days of the exercise (or deemed exercise) of the Canopy Call Option.

See “The Amended Arrangement – Description of the Amended Arrangement”, “The Amended Arrangement – Timing for Implementation of the Amended Arrangement”, “The Amended Arrangement – Principal Steps of the Amended Arrangement” or the Amended Plan of Arrangement, a copy of which is attached as ‎Appendix “C” to this Circular.‎

Q: Will the Existing SVS continue to trade following the Amendment Date?

A: No, the Existing SVS will cease to trade on the CSE, the OTCQX and the Frankfurt Stock Exchange following the Amendment Date. Following the Capital Reorganization, each of the Fixed Shares and the Floating Shares will be listed on the CSE. Any Person who acquires Fixed Shares or Floating Shares following the Amendment Date (whether from a new issuance from treasury or a transfer) will acquire such Fixed Shares and Floating Shares subject to the terms and conditions of the Amended Plan of Arrangement, including the Canopy Call Option and the Floating Call Option.

See “Regulatory Matters - Stock Exchange Matters”.

Q: Who will be the directors and officers of Acreage following implementation of the Amended Plan of Arrangement and the Acquisition?‎

A: Following the Amendment Time, it is not currently expected that there will be any change to the directors and ‎officers of Acreage. During the Amendment Interim Period, other than the existing directors and officers of ‎the Company, ‎Acreage cannot nominate or appoint, as applicable, any individual to serve as a director or officer of the ‎Company that does not meet the Required Director Criteria or ‎the Required Officer Criteria, as applicable. At ‎the Acquisition ‎Time, each of the directors and officers are expected to resign and Canopy Growth will be ‎entitled to designate all replacement directors and officers to fill such vacancies In the event that the Floating ‎Call Option is not exercised, Canopy Growth will have the right, until the End ‎Date, to nominate a majority of ‎the directors on the Acreage ‎Board‎.

See “Transaction Agreements – Amending Agreement – Covenants Regarding Acreage’s Directors and Officers”.‎

Q. Will the Exchange Ratio and/or the Floating Ratio be reduced prior to the Triggering Event Date?

A: The Exchange Ratio and the Floating Ratio will only be reduced in the event that Acreage breaches certain covenants set out in the Amended Arrangement Agreement with respect to the maximum number of Fixed Shares and Floating Shares it may issue during the Amendment Interim Period, or, in the case of the Exchange Ratio, if Acreage is required to make a Payout.

Q: Are there any risks I should consider in connection with the Amended Arrangement?‎

A: Yes. There are a number of risk factors relating to the Amended Arrangement, the Acquisition, and the business and ‎operations of each of Acreage and Canopy Growth, all of which should be carefully considered. These risks include, among others: the significant restriction on the ability of the Company to conduct its business in the ordinary course in the event that certain Pro-Forma Net Revenue Targets and Consolidated Adj. EBITDA Targets for each applicable fiscal year ‎of the Initial Business Plan are not met; ‎the Company may be unable to raise additional funds as needed, the scope of the Company’s operations or growth may be ‎reduced and, as a ‎result, the Company may be unable to fulfil its long-term goals; the Company may breach its restrictive covenants under the Arrangement Agreement, which could result in Canopy Growth ‎‎not having to complete the Acquisition at the Acquisition Time; and the possibility that Canopy Growth will exercise the Canopy Call Option and not exercise the Floating Call Option, and the depressing effect on the trading price of the Floating Shares that would likely have‎. See “Risk Factors”.‎

Q: Given the significant restrictions on issuing Company Debt and securities of Acreage, how does Acreage anticipate financing its business on an on-going basis?

A: Acreage has refined its business strategy by taking steps to target cash flow positive operations and its expectation is that all future growth of Acreage will be principally driven by its operational success. Such steps will include the proposed Non-Core Divestitures and limitation of the Company’s business to the Identified States. Depending upon the timing of the Acquisition and the state of Acreage’s business, Acreage may need to obtain additional financing and, any such financing must be done in accordance with the restrictions contained in the Amended Arrangement Agreement or with the consent of Canopy Growth.

Q: Are Shareholders entitled to Dissent Rights?

A: Yes. Under the Amendment Interim Order, Registered Shareholders are entitled to Dissent Rights if the ‎Amendment Resolution is approved, but only if such Registered Shareholders follow the procedures specified in the ‎BCBCA, as modified by the Amended Plan of Arrangement, the Amendment Interim Order and the Amendment Final Order. If you wish to exercise ‎Dissent Rights, you should review the requirements summarized in this Circular carefully and consult with your legal ‎advisor. Any failure by a Shareholder ‎to fully comply with the provisions of the BCBCA, as modified by the Amended Plan of Arrangement, the Amendment Interim Order ‎and the Amendment Final Order, may result in the loss of that holder’s Dissent Rights.‎

See “Dissenting Shareholders’ Rights”.‎

Q: Do Shareholders, High Street Holders and USCo2 Holders need to provide a letter of transmittal or take any other steps to receive their portion of the Aggregate Amendment Option Payment?

A: No. All holders of Shares, High Street Units and USCo2 Shares as of the close of business on the Business Day ‎immediately prior to the Amendment Date will be entitled to receive their pro rata share of the Amendment ‎Consideration without taking any further action‎.

See “Procedures For Payment Of Aggregate Amendment Option Payment And Canopy Growth ‎Consideration”.

Q: Should I send in my Capital Reorganization Letter of Transmittal and Existing Share certificates now?

A: All Registered Shareholders should complete, sign and return the Capital Reorganization Letter of Transmittal with accompanying Existing Share certificate(s) or direct registration advice to the Transfer Agent as soon as possible. If the Amendment Resolution is adopted and the Amending Agreement is executed, all deposits of Existing Shares, as applicable, made under the Capital Reorganization Letter of Transmittal are irrevocable.

Any certificate(s) or direct registration advice that immediately prior to the Amendment Time represent Existing Shares shall be deemed after the Amendment Time to represent only the right to receive certificate(s) or a direct registration advice representing the Shares to be issued in exchange therefor upon surrender thereof.

See “The Amended Arrangement - Capital Reorganization Letter of Transmittal”.

Background

Q: What is the process that led to the proposed amendments to the Plan of Arrangement and the Arrangement Agreement?

A: Since inception, Acreage made significant investments into its business for growth, operational and capital ‎needs and suffered substantial losses‎.  Following implementation of the Existing Arrangement on June 27, 2019, ‎Acreage attempted to leverage the Existing Canopy Option and Acreage’s ‎relationship with Canopy Growth in pursuit of various alternatives to finance Acreage’s business, including certain potential ‎acquisition alternatives; however, these efforts were not successful. Given the structural limitations on ‎financing alternatives imposed on companies operating in the U.S. cannabis industry and the challenging capital ‎markets conditions that Acreage faced in the latter half of 2019, efforts to secure third party financing in late 2019 were ‎unsuccessful. Canopy Growth’s regulatory and compliance ‎constraints restricted its ability to directly or indirectly invest in Acreage‎. Faced with a working capital shortfall, Acreage embarked on various financing ‎alternatives‎ throughout much of the past year. The Arrangement Agreement contained a number of constraints on Acreage which prevented it from pursuing financing and M&A transactions which fell outside a narrow set of parameters without Canopy Growth’s consent.  Acreage considered a number of potential financing proposals; however, it did not identify any options which were satisfactory to Acreage and complied with the Arrangement Agreement.

Initially, when discussing the terms upon which the Existing Arrangement would be amended, Canopy Growth indicated that it would be willing to consider alternatives to assist Acreage, provided that any such alternatives would be subject to a concurrent reduction of the Existing Exchange Ratio to 0.1 of a Canopy Growth Share to align with the then current trading prices of the Existing SVS and the Canopy Growth Shares. ‎Through extensive negotiations with Canopy Growth, the Company was ultimately able to negotiate an improved exchange ratio of 0.3048 of a Canopy Growth Share for each Fixed Share as well as the issuance of the Floating Shares, which are anticipated to provide additional upside to Shareholders.

A summary of the material events leading up to the negotiation of the Proposal Agreement and the Amended Arrangement and the material meetings, negotiations and discussions between Acreage and Canopy Growth and their respective advisors that preceded the execution of the Proposal Agreement and public announcement of the Amended Arrangement is included in this Circular under the heading “The Amended Arrangement - Background to the Amended Arrangement”. See also “Reasons for the Amended Arrangement” and “Cautionary Statement Regarding Forward-Looking Information”‎.

Q: Has a fairness opinion been provided on the Amended Arrangement?

A: Yes, the Special Committee received the New Fairness ‎Opinion, pursuant to which Eight Capital provided its opinion that, as at the date of each such opinion and subject to the assumptions, qualifications and limitations set out therein, and such other matters as Eight Capital considered relevant, the Consideration to be received by Shareholders pursuant to the Amended Arrangement is fair, from a financial point of view, to the Shareholders. The New Fairness Opinion can be found in Appendix “D” to the Circular.

See “The Amended Arrangement‎ – New Fairness Opinion”.

Q: Does the Acreage Board support the amendments to the Arrangement Agreement and the Amended Plan of Arrangement?

A: Yes. The Acreage Board has unanimously (with the exception of Mr. Murphy, who declared his interest in the transactions contemplated by the Proposal Agreement and the Amending Agreement and abstained from voting in respect thereof) determined, that the Amended Arrangement and entry into the Proposal Agreement are in the best interests of Acreage and are fair to Shareholders and recommends that Shareholders vote FOR the Amendment Resolution.

In making its recommendation, the Acreage Board consulted with Acreage management and received the advice and assistance of its financial and legal advisors, and carefully considered a number of alternatives and factors including, among others, the unanimous recommendation of the Special Committee and the New Fairness Opinion and the factors described in this Circular under the heading “The Arrangement – Reasons for the Arrangement”. All directors and officers, including Mr. Murphy, entered into Voting Agreements with Canopy Growth pursuant to which each of them has agreed to vote their Shares in favor of the Amendment Resolution.

‎

See “The Amended Arrangement – Background to the Amended Arrangement”, “The Amended Arrangement – Recommendation of the Special Committee”, “The Amended Arrangement – Recommendation of the Acreage Board” and “The Arrangement – Reasons for the Arrangement”.

Q: What strategic benefits have been realized by Acreage through its relationship with Canopy Growth since the implementation of the Existing Arrangement and will the A&R License and the Amended Arrangement Agreement provide any additional benefits?

A: Acreage has commenced selling products under Canopy Growth’s Tweed brand in multiple states and Acreage anticipates that it will continue to take advantage of opportunities to market and sell products under Canopy Growth brands. As a condition to the Amending Agreement becoming effective, a subsidiary of Canopy Growth will provide Hempco with a US$100,000,000 loan pursuant to the Debenture, of which US$50,000,000 will be advanced at the Amendment Time. This will provide Acreage with the necessary funding to operate in the CBD market. Acreage anticipates that the operations of Hempco will be profitable and drive overall value for Shareholders.

See “The Amended Arrangement – Reasons for the Amended Arrangement” and “Cautionary Note Regarding Forward-Looking Information”.

Approvals

Q: What approvals are required of Shareholders at the Meeting?

A: To be adopted, the Amendment Resolution must be approved by: (i) not less than 66⅔% of the votes cast on the Amendment Resolution by Shareholders present virtually or represented by proxy and entitled to vote at the Meeting, voting together as a single class; (ii) not less than a simple majority of votes cast by the holders of Existing SVS and Existing PVS, present virtually or represented by proxy and entitled to vote at the Meeting, voting together as a single class‎, ‎excluding the votes of the Interested Parties pursuant to MI 61-101; and (iii) not less than a simple majority of the votes cast by the holders of Existing SVS, Existing PVS and Existing MVS, present virtually or represented by proxy and entitled to vote at the Meeting, voting together as a single class, ‎excluding the votes of the Related Parties. Abstentions and broker non-votes will not have any effect on the approval of the Amendment Resolution.

See the sections in the Circular entitled “The Amended ‎Arrangement – Required Shareholder Approvals”, “The Amended Arrangement – Interests of Certain Persons in the Amended Arrangement”, “Securities Law Matters – Canadian Securities Laws – ‎Multilateral Instrument 61-101” and “Securities Law Matters – Canadian Securities Laws – ‎Restricted Securities Matters”.‎

Q: Are there voting agreements or lock-ups?

A: The Acreage Locked-Up Shareholders have entered into Voting Agreements with Canopy Growth pursuant to which the Acreage Locked-Up Shareholders have agreed to vote their Existing Shares in favor of the Amendment Resolution.

As of the Record Date, the Acreage Locked-Up Shareholders collectively beneficially owned or exercised ‎control or direction over [] Existing SVS, [] Existing PVS and 168,000 ‎Existing MVS, representing on a non-diluted basis, approximately []% of the outstanding Existing SVS, approximately []% of the outstanding Existing PVS and 100% of the outstanding Existing MVS. The ‎Interested Parties that are Acreage Locked-Up Shareholders own, control or direct approximately []% of the outstanding ‎Existing SVS, approximately []% of the outstanding Existing PVS and 100% of the outstanding ‎Existing MVS subject to the Voting Agreements. On an aggregate basis, the Interested Parties ‎own, control or direct approximately []% of the outstanding voting rights in the Company.‎

See “Transaction Agreements – Voting Agreements”.‎

Q: What other conditions need to be satisfied for the Amended Arrangement to become effective?

A: The Amendment Resolution must be approved by the Shareholders at the Meeting in accordance with the Amendment Interim Order and applicable Law.‎ In addition, the Amendment Final Order must be issued by the Court. The necessary approvals from the CSE must also be obtained to list the Fixed Shares and the Floating Shares. ‎Furthermore, it is a condition that certain agreements are entered into or amended, as applicable, including the Amending Agreement, the Housekeeping Amendments and the Credit Agreement Amendment.

For a full description of the conditions listed above and the other conditions to the implementation of the Arrangement, see “Transaction Agreements – Proposal Agreement – Conditions for Implementation of the Amended Arrangement”.

Q: What other conditions are required to be satisfied or waived for the Acquisition to be completed pursuant to the Amended Arrangement?

A: The Acquisition is dependent on the satisfaction of the Acquisition Regulatory Approvals, which includes ‎‎approval: (i) under the HSR Act; (ii) by certain of the state cannabis regulatory authorities that govern Acreage’s ‎‎operations in each state in which it or its managed entities then carry on business; and (iii) by each of the stock ‎‎exchanges on which the Canopy Growth Shares are then listed and posted for trading to permit Canopy Growth to ‎acquire all of the issued and outstanding Shares and to permit the listing of the Consideration Shares, and ‎any Canopy Growth Shares issuable upon the exercise of Replacement Options, Replacement RSUs and ‎Replacement Compensation Options. In addition, the Acquisition is subject to other Regulatory Approvals, and the ‎satisfaction or waiver of other closing conditions. ‎

For a full description of the conditions to the consummation of the Acquisition, see “Transaction Agreements – The ‎Arrangement Agreement – Conditions for Completion of the Acquisition”, “Regulatory Approvals – HSR Act” and “Regulatory Approvals – Stock Exchange Matters”.

Operational Constraints and Canopy Growth Rights

Q: What operational constraints will be imposed on Acreage by Canopy Growth during the Amendment Interim Period?

A: During the Amendment Interim Period, Acreage will, and will cause each of its Subsidiaries to, conduct its and their business only in the ordinary course and in accordance with, in all material respects, all applicable Laws, with the exception of the Controlled Substances Act as it applies to marijuana, and use commercially reasonable efforts to maintain and preserve its and their business. The operations of Acreage during the Amendment Interim Period remain subject to the operational covenants under the Arrangement Agreement as well as the additional operational covenants under the Amending Agreement as described under “Transaction Agreements – Amending Agreement”, which include, but are not limited to, restrictions on the ability of the Company and its Subsidiaries to issue any securities and incur any debt obligations, in each case, other than in certain limited circumstances.

Pursuant to the Arrangement Agreement, during the Interim Period, Acreage will be required to obtain Canopy Growth’s approval prior to taking certain actions, including, without limitation, amendments to its constating documents and/or capitalization, distributions on its outstanding securities or otherwise, amendments to its employment, retention and/or compensation arrangements, incurring debt above certain thresholds, or ‎otherwise taking any actions that would be reasonably expected to result in a Company Material Adverse Effect.‎

The Amending Agreement also precludes the Company from entering into any contract ‎in respect of ‎Company ‎Debt if, among ‎other restrictions: (i) ‎such contract would be materially inconsistent with market ‎standards for ‎companies ‎operating in the United States cannabis industry; (ii) such ‎contract prohibits a prepayment of ‎the ‎principal amount of such Company Debt, ‎requires a make-whole payment for the interest ‎owing during the ‎remainder of the ‎term of such contract or charges a prepayment fee in an ‎amount greater than 3.0% ‎of the ‎principal amount to be repaid; (iii) such contract would ‎provide for interest ‎payments to be paid through the ‎issuance of securities as opposed to ‎cash; or (iv) ‎such contract has a principal amount of more than ‎US$10,000,000 or a Cost of ‎‎Capital that is greater than 30.0% per ‎annum; ‎provided that, if such Company ‎Debt is fully secured by cash in a blocked ‎account, the Cost of Capital may not be greater than 3.0% per ‎annum. ‎Notwithstanding the foregoing, Canopy ‎Growth’s consent will not be required for ‎Acreage or any of its Subsidiaries to enter into a ‎maximum of two transactions ‎for Company Debt during any one-year period, ‎in accordance ‎with the following ‎terms: (i) the principal amount of the Company Debt per transaction may ‎not ‎‎exceed US$10,000,000, (ii) the Company Debt is not convertible into any ‎securities; and ‎‎(iii) the contract ‎does not provide for the issuance of more than ‎‎500,000 Shares (or ‎securities convertible into or exchangeable ‎for ‎‎500,000 Shares). The Amending Agreement will also require the Company to limit its operations to the ‎‎Identified States, subject to obtaining Canopy Growth’s consent‎.

For a description of the additional restrictions on the activities of Acreage during the Amendment Interim Period, see “Transaction Agreements – Proposal Agreement – Covenants”, “Transaction Agreements –Amendments to the Arrangement Agreement” and “Transaction Agreements – Amending Agreement – Covenants Regarding Acreage’s Business Plans”.

Q: If Canopy Growth does not exercise the Floating Call Option, during the period following the Acquisition Date until the End Date, will there be any covenants in favor of Canopy Growth?

A: The Amending Agreement will provide for certain covenants of Acreage regarding its business and operations that will be effective from the Acquisition Time until the End Date, including, among other things:

See “Transaction Agreements – Amending Agreement – Covenants Following the Acquisition Time until the End Date”.

In addition, pursuant to the A&R License, following the Acquisition Time, the Company is required to ‎pay a royalty to Canopy Growth equal to a percentage of all gross revenue ‎generated by the Company as a result of the use of the rights granted pursuant to the ‎A&R License. ‎Moreover, revenue under the Management Service Agreements, if any, will no longer be required to be paid to Acreage by the Target Cannabis Operators, if any, following the Acquisition Time.

Q: If Canopy Growth does not exercise the Floating Call Option, following the Acquisition Time, what Acreage activities will require Canopy Growth’s approval?

A: During the period from the Acquisition Date until the End Date, there will be a number of restrictions imposed on both the Company and its Subsidiaries, subject to obtaining Canopy Growth’s approval, including, without limitation, restrictions regarding:

See “Transaction Agreements – Amending Agreement – Covenants Following the Acquisition Time until the ‎End Date”.‎

Q: What are the expected consequences of limiting Acreage’s ability to operate to the Identified States?

A: With a reduced geographic footprint, Acreage will be able to focus its strategic plan on deploying its capital in a manner that Acreage believes will be immediately accretive. Given that Acreage has recently faced challenges raising capital and, when available, the cost of capital has been high in recent financings, a focus on the Identified States is anticipated to allow Acreage to improve its results from the Identified States while maximizing potential margins on sales and scaling its production capabilities (where Acreage’s licenses permit).

See “Cautionary Note Regarding Forward-Looking Information”.

Hempco Business

Q: Can Canopy Growth compete with Acreage’s business or the business of Hempco?

A: There is no restriction in respect of Canopy Growth’s ability to compete with the business of Hempco, provided that the activities carried on by Canopy Growth do not violate applicable Laws, including, without limitation, Federal Cannabis Laws‎. Notwithstanding the foregoing, in the event of a Material Failure to Perform, Canopy Growth will no longer be restricted from operating within the United States in violation of Federal Cannabis Laws.

Q: What are the expected benefits to Shareholders of the Hempco business?

A: The potential enhancement of profitability and the potential consequent ability to attract new investors could be a value driver for Shareholders.

See “Cautionary Note Regarding Forward-Looking Information”.

Q: What is the expected use of the net proceeds of the Initial Advance of US$50,000,000 to Hempco pursuant to ‎the Debenture?

A: Acreage is developing a multi-pronged approach for the business of Hempco, including a store-within-a-store ‎concept to sell CBD exclusive products, and a wholesale and OMNI channel approach. These various ‎delivery methods require capital assets and additional operating costs to support the business ‎strategy‎.

See “Cautionary Note Regarding Forward-Looking Information”.

Tax Consequences

Q: What are the Canadian federal income tax consequences of the Amended Arrangement?

A: It is expected that Shareholders who are residents of Canada for the purposes of the Tax Act and who hold their Existing SVS as capital property will be deemed to have disposed of a property and realize a capital gain from the receipt of a portion of the Aggregate Amendment Option Payment as ‎consideration for granting the Canopy Call Option and the Floating Call Option. If the Canopy Call Option and/or the Floating Call Option are exercised (or deemed to be exercised), Shareholders who are resident in Canada should no longer be deemed to have disposed of property in the year in which the Canopy Call Option and the Floating Call Option were granted. Instead, the amount of the Aggregate Amendment Option Payment received by such Shareholder should be included in the Shareholder’s proceeds of disposition from the disposition of the Fixed Shares and/or the Floating Shares to Canopy. In such case, a tax election may be available to provide for a full or partial tax-deferred rollover.

Shareholders who are not residents of Canada for the purposes of the Tax Act will not be subject to tax ‎under the Tax Act on the capital gain deemed to be realized in respect of the receipt of a portion of the Aggregate Amendment Option ‎Payment as consideration for granting the Canopy Call Option and the Floating Call Option.‎

Shareholders who hold their Existing SVS as capital property and who exchange their Existing SVS for 0.7 of a Fixed Share and 0.3 of a Floating Share pursuant to the Capital Reorganization will be deemed to have disposed of their Existing SVS for proceeds equal to their ‎adjusted cost base of those shares and will acquire the Fixed Shares and Floating Shares at an aggregate ‎adjusted cost base equal to that amount. As a result, the Capital Reorganization will not result in a recognition of a capital ‎gain or loss for Canadian income tax purposes.‎

For a summary of certain material Canadian income tax consequences of the Arrangement, see “Certain ‎Canadian Federal Income Tax Considerations”. Such summary is not intended to be legal or tax advice to any ‎particular Shareholder. Shareholders should consult their own tax advisors with respect to their ‎particular circumstances.‎

Q: What are the Canadian federal income tax consequences of the Acquisition?

A: Generally, Shareholders who are residents of Canada for the purposes of the Tax Act, who have received a portion of ‎the ‎Aggregate Amendment Option Payment pursuant to the Arrangement, and who dispose of their Fixed Shares and/or Floating Shares to Canopy ‎Growth ‎pursuant to the Acquisition will be considered to have realized a capital gain (or capital loss) for the ‎purposes ‎of the Tax Act as a result of the Acquisition unless the Shareholder makes a Joint Tax Election ‎with Canopy ‎Growth following the Acquisition.‎

Shareholders who are not residents of Canada for the purposes of the Tax Act (a Non-Canadian Holder) generally should not be ‎subject to ‎tax under the Tax Act on any capital gain realized in respect of the Acquisition provided that the Fixed ‎Shares and/or Floating Shares ‎are not “taxable Canadian property” to such Shareholder for purposes of the Tax Act.‎

For a summary of certain material Canadian income tax consequences of the Acquisition, see “Certain Canadian ‎‎Federal Income Tax Considerations”. Such summary is not intended to be legal or tax advice to any particular ‎Shareholder. Shareholders should consult their own tax advisors with respect to their particular ‎circumstances.‎

Q: What are the United States federal income tax consequences associated with the Option Premium?

A: Pursuant to the Plan of Arrangement, Canopy Growth paid the Option Premium to all holders of Existing ‎Shares, High Street Holders and USCo2 Holders as consideration for the grant of the ‎Existing Canopy Option. It was intended, for U.S. federal income tax purposes, that the ‎payment of the Option Premium, would be treated as a part of a continuing, open transaction that generally did ‎not result in immediate recognition of income to the Shareholders and certain other securityholders. However, ‎given the amendments to the Existing Arrangement pursuant to the Amended Arrangement, it is now expected ‎that U.S. Holders who have received a portion of the Option Premium will be required to report (to the extent ‎not previously included in income) the portion of the Option Premium they received as short-term capital gain ‎in the taxable year in which the Amended Plan of Arrangement becomes effective. Non-U.S. Holders will only ‎be subject to U.S. federal income tax to the extent described below with respect to Non-U.S. Holders generally ‎for gain recognized in connection with the Acquisition‎.

For a summary of certain U.S. federal income tax consequences of the Amended Arrangement, ‎including the Option Premium, see “Certain United States Federal Income Tax Considerations”. Such ‎summary is not intended to be legal or tax advice. Shareholders are urged to consult their own tax ‎advisors with respect to the tax consequences to them of the Amended Arrangement in general and ‎based on their particular circumstances‎.

Q: What are the United States federal income tax consequences of the Aggregate Amendment Option Payment?

A: The U.S. federal income tax treatment of the Aggregate Amendment Option Payment‎ is unclear.  The Aggregate Amendment Option Payment‎ will be paid to the Shareholders, High Street Holders and USCo2 Holders in connection with the reduction of the Exchange Ratio and the modification of the terms of the Existing Canopy Option through the issuance of the Canopy Call Option and Floating Call Option under the Amended Plan of Arrangement. For U.S. federal income tax purposes, this payment may be treated as ordinary income, short-term capital gain, option premium that is part of an open transaction and not immediately includible in income, or other consideration paid in connection with modifying the Existing Arrangement. Acreage expects that the Aggregate Amendment Option Payment‎ would generally be treated as ordinary income. However, due to the absence of guidance bearing directly on the U.S. federal income tax consequences of the receipt of the Aggregate Amendment Option Payment‎, this expectation is not free from doubt. The Shareholders should consult their own tax advisors in regard to the tax consequences to them of the receipt of their portion of the Aggregate Amendment Option Payment‎.

Non U.S. Holders will generally be limited in their recognition of gain or income upon receipt of the Aggregate Amendment Option Payment‎ and should consult with their own tax advisors to determine the extent that such income or gain will be recognized.

The amount of cash received with respect to the Aggregate Amendment Option Payment‎ may not be sufficient to meet the tax obligations of the Shareholders triggered with respect to the Option Premium and the Aggregate Amendment Option Payment‎ described above.

For a summary of certain U.S. federal income tax consequences of the Amended Arrangement, including the payment of the Aggregate Amendment Option Payment‎, see “Certain United States Federal Income Tax Considerations”. Such summary is not intended to be legal or tax advice. Shareholders are urged to consult their own tax advisors with respect to the tax consequences to them of the Amended Arrangement in general and based on their particular circumstances.

Q: What are the United States federal income tax consequences of the Capital Reorganization?

A: Acreage will undertake the Capital Reorganization whereby each outstanding Existing Share will be exchanged for Fixed Shares (or Fixed Multiple Shares) and Floating Shares. For U.S. federal income tax purposes, the Company intends that the Capital Reorganization will be treated as a “recapitalization” within the meaning of Section 368(a)(1)(E) of the Code. Assuming the Capital Reorganization qualifies as a recapitalization, the Shareholders generally will not recognize gain or loss in the exchange of Existing Shares for Fixed Shares (or Fixed Multiple Shares) and Floating Shares. The tax basis of the Shares received by a Shareholder in the Capital Reorganization will generally the same as the basis of the Existing Shares surrendered in exchange therefor. A Shareholder must allocate its tax basis in its Existing Shares between the Fixed Shares (or Fixed Multiple Shares) and Floating Shares that the Shareholder receives in proportion to their relative fair market values determined on the date of the Capital Reorganization. The holding period of the Fixed Shares (or Fixed Multiple Shares) and Floating Shares received will include such holder’s holding period in the Existing Shares with respect to which the Fixed Shares (or Fixed Multiple Shares) and Floating Shares were exchanged.

For a summary of certain U.S. federal income tax consequences of the Amended Arrangement, including the Capital Reorganization, see “Certain United States Federal Income Tax Considerations.” Such summary is not intended to be legal or tax advice. Shareholders are urged to consult their own tax advisors with respect to the tax consequences to them of the Amended Arrangement in general and based on their particular circumstances.

Q: What are the United States federal income tax consequences of the Acquisition?

A: Under the Existing Arrangement, it was intended that (i) the Plan of Arrangement and culminating Acquisition (as defined in the Existing Arrangement) would be treated as a single integrated transaction for U.S. federal income tax purposes, (ii) such Acquisition would qualify as a “reorganization” within the meaning of Sections 368(a)(1)(A) and 368(a)(2)(E) of the Code and the Treasury Regulations promulgated thereunder, each as in effect on the date of the Existing Arrangement, and (iii) such Acquisition would not be treated as a taxable transaction pursuant to Section 367(a) of the Code and the Treasury Regulations promulgated thereunder, each as in effect on such date (which assumed that certain factual requirements would be met with respect to the ownership, value and operations of Canopy Growth and Acreage, certain five-percent shareholders of Canopy Growth immediately after the Acquisition enter into gain recognition agreements as required by the applicable U.S. Treasury Regulations, and certain reporting requirements would be met (collectively the “Section 367 Requirements”))

Under the Amended Arrangement, it is intended that the steps of the Acquisition will be treated as a single integrated transaction for U.S. federal income tax purposes, and will involve Canopy Growth acquiring all of the Fixed Shares (and New Multiple Shares exchanged into Fixed Shares), and, if applicable, the Floating Shares, in three steps: first, each New Multiple Share outstanding immediately prior to the Acquisition Time shall be exchanged for one Fixed Share; second, Canopy Growth will acquire the Fixed Shares held by Acreage Non-U.S. Shareholders (other than those Acreage Non-U.S. Shareholders that exercise Dissent Rights) and, to the extent Canopy Growth exercises the Floating Call Option, the Floating Shares, in a direct exchange of those Fixed Shares and Floating Shares, if applicable, for Canopy Growth Shares (or, in the event a Canopy Change of Control has occurred prior to the Acquisition Date, the Alternate Consideration); and third, Canopy Growth will acquire the remaining Fixed Shares held by Acreage U.S. Shareholders (other than those Acreage U.S. Shareholders that exercise Dissent Rights) in the Merger in exchange for Canopy Growth Shares (or, in the event a Canopy Change of Control has occurred prior to the Acquisition Date, the Alternate Consideration). Canopy Growth will have the option, but not the obligation, to acquire the Floating Shares.

The description of the U.S. federal income tax consequences of the Acquisition that follows is based on the assumption that U.S. Holders who received a portion of the Option Premium will be required to report such Option Premium (to the extent not previously included in income) as short-term capital gain in the taxable year in which the Amended Plan of Arrangement becomes effective, and that the Aggregate Amendment Option Payment‎ will be treated as ordinary income upon receipt.

Under the Amended Plan of Arrangement, if Canopy Growth does not acquire the Floating Shares, the Acquisition will not qualify as a reorganization for U.S. federal income tax purposes and, therefore, will be a fully taxable transaction in which a U.S. Holder that receives Canopy Growth Shares in exchange for Fixed Shares in the Merger generally will recognize capital gain or loss equal to the difference between the fair market value of the Canopy Growth Shares received and the U.S. Holder’s adjusted tax basis in the Fixed Shares exchanged therefor. The gain or loss would be determined separately for each block of Fixed Shares (i.e., Fixed Shares acquired at the same cost in a single transaction). Capital gains recognized by an individual upon the disposition of Fixed Shares that have been held for more than one year are generally eligible for reduced rates of U.S. federal income taxation. The deductibility of capital losses is subject to limitations.

Even if both the Fixed Shares and the Floating Shares are acquired by Canopy Growth in the Acquisition, the Acquisition may not qualify as a reorganization for U.S. federal income tax purposes. Certain factors that affect the U.S. federal income tax treatment of the Acquisition will not be determinable until the Acquisition Date, including whether the Floating Consideration is paid in Floating Share Consideration, Floating Cash Consideration or a combination thereof, and the value of the Canopy Growth Shares received in the Acquisition. Depending on these and other factors, the Acquisition may be treated as a taxable transaction in which gain or loss is generally recognized for U.S. federal income tax purposes, or it may be treated as a reorganization for U.S. federal income tax purposes (and which also meet the Section 367 Requirements). Neither Acreage nor Canopy Growth have sought, nor expect to seek, a ruling from the IRS as to any U.S. federal income tax consequence described herein.

If the Acquisition qualifies as a “reorganization” under Section 368(a) of the Code, and the Section 367 Requirements are met, it is expected that a U.S. Holder receiving Canopy Growth Shares in exchange for its Shares in connection with the Acquisition will not generally recognize gain or loss on the exchange.

Even if the Acquisition qualifies as a reorganization, there is a risk that the Acquisition could fail to meet the Section 367 Requirements. If the Acquisition fails to meet the Section 367 Requirements, the transaction will be taxable to U.S. Shareholders as described above, notwithstanding that it was a reorganization under the Code.

The rules described above for U.S. Holders should generally also apply to a Non-U.S. Holder that directly exchanges its Shares for Canopy Growth Shares, except that any such gain recognized by a Non-U.S. Holder generally will not be subject to U.S. federal income tax unless (i) the gain is “effectively connected” with such Non U. S. Holder’s conduct of a trade or business in the United States, and the gain is attributable to a permanent establishment that such Non-U.S. Holder maintains in the United States if that is required by an applicable income tax treaty as a condition for subjecting such person to U.S. taxation on a net income basis, or (ii) the Non-U.S. Holder is an individual, is present in the United States for 183 or more days in the taxable year of the sale and certain other conditions exist.

For a summary of certain U.S. federal income tax consequences of the Acquisition see “Certain United States Federal Income Tax Considerations”. Such summary is not intended to be legal or tax advice. Shareholders are urged to consult their own tax advisors with respect to U.S. federal income tax consequences of the Acquisition in general and based on their particular circumstances.

Questions

Q: Who can help answer my questions?

A: If you have any questions about this Circular or the matters described in this Circular, please contact Kingsdale Advisors or your professional advisor. Shareholders who would like additional copies, without charge, of this Circular or have additional questions about the procedures for voting Existing Shares, should contact their broker or Kingsdale Advisors by e-mail, or at the telephone number below.

Q&A ON PROXY VOTING

Q: Who is entitled to vote on the Amendment Resolution?

A: The record date for determining the Shareholders entitled to receive notice of and to vote at the Meeting was August 13, 2020. Only Shareholders of record as of the close of business on the Record Date are entitled to receive notice of and to vote at the Meeting. Any securities of the Company, High Street or USCo2 that were not exercised or exchanged for Existing Shares prior to the Record Date are not permitted to vote on the Amendment Resolution.

Q: What if I acquire ownership of Existing Shares after the Record Date?‎

A: You will not be entitled to vote Existing Shares acquired after the Record Date at the Meeting. Only Persons ‎owning Existing Shares as of the Record Date are entitled to vote at the Meeting. ‎‎Shareholders will still be able to receive the Aggregate Amendment Option Payment if they hold Existing Shares as of the close of business on the Amendment Date. ‎

Q: What do I need to do now in order to vote on the Amendment Resolution?

A: You should carefully read and consider the information contained in this Circular.

The Company‎ is holding the Meeting as a virtual meeting, which will be conducted via live webcast. To address potential issues arising from the unprecedented public health impact of COVID-19, comply with applicable public health directives that may be in force at the time of the Meeting‎, and to limit and mitigate risks to the health and safety of our communities, Shareholders, employees, directors and other stakeholders, we will be holding the Meeting in a virtual only format as described in the Circular under the headings, “General Proxy Information” and “How to Vote Your Shares”.

In order to attend, participate in or vote at the Meeting (including for voting and asking questions at the Meeting), Registered Shareholders and duly appointed proxyholders must have a valid username. Guests are welcome to attend and view the webcast, but will be unable to participate in or vote at the Meeting. To join as a guest please visit the Meeting online at web.lumiagm.com/221798142 and select “Join as a Guest” when prompted.

Registered Shareholders and duly appointed proxyholders will be able to access the Meeting online at web.lumiagm.com/221798142. Such persons may then enter the Meeting by clicking “I have a login” and entering a username and password before the start of the Meeting:

If you are a Non-Registered Shareholder and wish to attend, participate in or vote at the Meeting, you have to insert your own name in the space provided on the VIF sent to you by your Intermediary, follow all of the applicable instructions provided by your Intermediary AND register yourself as your proxyholder, as described above. By doing so, you are instructing your Intermediary to appoint you as proxyholder. It is important that you comply with the signature and return instructions provided by your Intermediary.

There are three ways to submit your vote by proxy, in accordance with the instructions on the form of proxy:

Each completed form of proxy must be submitted no later than 11:00 a.m. (New York time) on September 14, 2020, or, in the event that the Meeting is adjourned or postponed, not less than 48 hours (excluding Saturdays, Sundays and holidays) prior to ‎the time of the reconvened Meeting or any adjournment or postponement thereof.

If you hold your Existing Shares through an Intermediary, please follow the instructions provided by such Intermediary to ensure that your vote is counted at the Meeting and contact your Intermediary for instructions and assistance in delivering the share certificate(s) representing those shares.

See “General Proxy Information” and “How to Vote Your Shares”.

Q: Should I send in my proxy now?

A: Yes. Once you have carefully read and considered the information contained in this Circular, to ensure your vote is counted, you need to complete and submit the enclosed form of proxy or, if applicable, provide your Intermediary with voting instructions. You are encouraged to vote well in advance of the proxy cut-off at 11:00 a.m. (New York time) on September 14, 2020 (or if the Meeting is postponed or adjourned, not later than 48 hours (excluding Saturdays, Sundays and holidays) before the time for holding the postponed or adjourned meeting).

See “General Proxy Information” and “How to Vote Your Shares”.

Q: What happens if I sign and submit the form of proxy sent to me?

A: Signing and depositing the enclosed form of proxy gives authority to the Person(s) designated by management of Acreage on such form to vote your Existing Shares at the Meeting. If the instructions in a proxy given to Acreage’s management are specified, the Existing Shares represented by such proxy will be voted for or against in accordance with your instructions on any poll that may be called for. If a choice is not specified, the Existing Shares represented by a proxy given to Acreage’s management will be voted FOR the approval of the Amendment Resolution as described in this Circular.

See “General Proxy Information” and “How to Vote Your Shares”.

Q: Can I appoint someone other than the Person(s) designated by management of Acreage to vote my Existing Shares?

A: Yes. Shareholders who wish to appoint a third-party proxyholder to represent them at the Meeting (including Non-Registered Shareholders who wish to appoint themselves as proxyholder to attend, participate in or vote at the Meeting) MUST submit their duly completed proxy or VIF and register the proxyholder in advance of the proxy cut-off at 11:00 a.m. (New York time) on September 14, 2020 to attend the Meeting virtually.

See “General Proxy Information” and “How to Vote Your Shares”.

Q: What if amendments are made to these matters or if other matters are brought before the Meeting?

A: The form of proxy accompanying this Circular confers discretionary authority upon the proxy nominee with respect to any amendments or variations to matters identified in the Notice of Meeting and any other matters that may properly come before the Meeting or any postponement or adjournment thereof. As of the date of this Circular, Acreage’s management is not aware of any such amendments or variations, or of other matters to be presented for consideration at the Meeting. However, if any amendments to matters identified in the accompanying Notice of Meeting or any other matters which are not now known to management should properly come before the Meeting or any postponement or adjournment thereof, the Existing Shares represented by properly executed proxies given in favor of the Person(s) designated by management of Acreage in the enclosed form of proxy will be voted on such matters pursuant to such discretionary authority.

See “General Proxy Information” and “How to Vote Your Shares”.

Q: Can I change my vote after I have voted by proxy?

A: Yes. A Registered Shareholder who has given a proxy may revoke the proxy at any time prior to use by: (i) ‎depositing an instrument in writing, including another completed form of proxy, executed by such Registered Shareholder or ‎by his or her attorney authorized in writing or by electronic signature, or, if the Registered Shareholder is a corporation, by an ‎authorized officer or attorney thereof, or by transmitting by telephone or electronic means, a revocation signed, subject to ‎the BCBCA, by electronic signature: (i) to the head office of the Company, located at 366 Madison Avenue, 11th Floor, ‎New York, New York 10017, at any time prior to 5:00 p.m. (New York time) on the last Business Day preceding the day of the Meeting ‎or any adjournment or postponement thereof; (ii) with the Chair of the Meeting on the day of the Meeting or any ‎adjournment or postponement thereof, prior to the start of the Meeting or any adjournment or postponement thereof; or (iii) ‎in any other manner permitted by Law.‎ If as a Registered Shareholder you are using your control number to access the Meeting and you accept the terms and conditions, you will be revoking any and all previously submitted proxies for the Meeting and will be provided with the opportunity to vote by online ballot on the matters put forth at the Meeting. If you do not wish to revoke a previously submitted proxy, you will need to attend the Meeting as a guest and will not be able to participate in the Meeting.

Only Registered Shareholders have the right to revoke a proxy. A Non-Registered Shareholder who has submitted a form of proxy may revoke it by contacting the Intermediary through ‎which its Existing Shares are held and following the instructions of the Intermediary respecting the revocation of proxies.‎

See “General Proxy Information” and “How to Vote Your Shares”.

Q: Who will count the votes?

A: Acreage’s transfer agent, Odyssey Trust Company, will count and tabulate the votes received for the Meeting.

Q: If my Existing Shares are held by my Intermediary, will they vote my Existing Shares?

A: Generally, Non-Registered Shareholders who have not ‎waived the right to receive Meeting Materials will be sent either:‎

If an Intermediary holds your Existing Shares in “street name,” your Intermediary will vote your Existing Shares only if you provide instructions on how to vote by filling out the VIF sent to you by your Intermediary with this Circular.

See “General Proxy Information” and “How to Vote Your Shares”.

If you have any questions please contact Kingsdale at 1.877.657.5856 toll-free in North America or +1.416.867.2272 outside of North America or by email at contactus@kingsdaleadvisors.com. Please visit [X] for additional information.

TABLE OF CONTENTS

ACREAGE HOLDINGS, INC.‎

CSE: ACRG.U

OTCQX: ACRGF

FSE: 0VZ

PROXY STATEMENT AND MANAGEMENT INFORMATION CIRCULAR

FOR THE SPECIAL MEETING OF SHAREHOLDERS

TO BE HELD ON SEPTEMBER 16, 2020

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PURPOSE OF SOLICITATION

This proxy statement and management information circular (the “Circular”) and accompanying form of proxy are furnished in connection ‎with the solicitation of proxies by the management of Acreage Holdings, Inc. (“Acreage” or the “Company”) for use at ‎the special meeting (the “Meeting”) of holders (the “Existing SVS Shareholders”) of the Class A subordinate voting shares (the “Existing SVS”), the holders (the ‎‎“Existing PVS Shareholders”) of Class B proportionate voting shares (the “Existing PVS”) and ‎the holders (the “Existing MVS Shareholders” and, together with the Existing SVS Shareholders and the Proportionate ‎Shareholders, the “Shareholders”) of Class C multiple voting shares (the “Existing MVS”, and together ‎with the Existing SVS and the Existing PVS, the “Existing Shares”) of the Company ‎to be held on September 16, 2020 commencing at 11:00 a.m. (New York time), and at any adjournment or ‎postponement thereof, for the purposes set forth in the accompanying notice of special meeting (the “Notice of Meeting”).

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The Company‎ is holding the Meeting as a virtual meeting, which will be conducted via live webcast. Shareholders will not be able to attend the Meeting in person.

All summaries of, and references to, the Proposal Agreement, the Amended Plan of Arrangement, the Amendment Resolution, the Amending Agreement, other related agreements, and the ‎New Fairness Opinion in this Circular are qualified in their entirety by reference to ‎the complete text of these documents, each of which is either included as an appendix to this Circular or filed under the ‎Company’s profile on SEDAR at www.sedar.com and with the SEC and available on EDGAR at www.sec.gov/edgar‎. Shareholders are urged to carefully read the full text of these documents.‎

GENERAL MATTERS

Defined Terms

In this Circular, unless otherwise indicated or the context otherwise requires, terms defined in the Glossary of ‎Terms herein shall have the meanings attributed thereto. Words importing the singular include the plural and vice versa and words ‎importing gender include all genders.

Information Contained in this Circular

The information contained in this Circular, unless otherwise indicated, is given as of August [¨], 2020.

No Person is authorized by Acreage to give any information (including any representations) in connection with the matters to be considered at the Meeting other than the information contained in this Circular. This Circular does not constitute an offer to sell, or a solicitation of an offer to acquire, any securities, or a solicitation of a proxy, by any Person in any jurisdiction in which such an offer or solicitation is not authorized or is unlawful.

Information contained in this Circular should not be construed as legal, tax or financial advice, and Shareholders should consult their own professional advisors concerning the consequences of the Amended Arrangement‎ in their own circumstances.

Neither the Proposal Agreement (including its fairness or merits), Amending Agreement (including its fairness or merits), Amended Arrangement‎ (including its fairness or merits), Amended Plan of Arrangement (including its fairness or merits) nor this Circular (including the accuracy or adequacy of the information contained in this Circular) has been approved or disapproved by any securities regulatory authority (including any Canadian provincial or territorial securities regulatory authority, the SEC or any other securities regulatory authority), and any representation to the contrary is unlawful.

Information Contained in this Circular Regarding Canopy Growth

Certain information included or incorporated by reference in this Circular pertaining to Canopy Growth, including, but not ‎limited to, information pertaining to Canopy Growth in Appendix “G” – Information Concerning Canopy Growth and ‎Appendix “H” – Information Concerning Canopy Growth following Completion of the Arrangement, has been furnished by ‎Canopy Growth, or is derived from Canopy Growth’s publicly available documents. With respect to this information, the ‎Acreage Board has relied exclusively upon Canopy Growth, without independent verification by the Company. Although ‎the Company does not have any knowledge that would indicate that such information is untrue or incomplete, neither the ‎Company nor any of its directors or officers assumes any responsibility for the accuracy or completeness of such ‎information, or for the failure by Canopy Growth to disclose events or information that may affect the completeness or ‎accuracy of such information.‎

For further information regarding Canopy Growth, please refer to Canopy Growth’s filings with the securities regulatory ‎authorities which may be obtained under Canopy Growth’s profile on SEDAR at www.sedar.com and with the SEC and available on EDGAR at www.sec.gov/edgar. See also Appendix “G” – ‎Information Concerning Canopy Growth.‎

Financial Information

Unless otherwise indicated, all financial information referred to in this Circular was derived from financial statements prepared in accordance with U.S. GAAP.

Currency

Acreage publishes their consolidated financial statements in U.S. dollars. Unless otherwise indicated in this Circular, all references to “$”, “US$” or “dollars” set forth in this Circular are to United States dollars and references to “Canadian dollars” and “C$” are to the currency of Canada.

The following table sets forth, for each period indicated, the high and low exchange rates, the average exchange rate, and the exchange rate at the end of the period, based on the rate of exchange of one U.S. dollar in exchange for Canadian dollars published by the Bank of Canada.

On June 24, 2020, the Business Day immediately prior to the Announcement Date, the average daily exchange rate as reported by the Bank of Canada was US$1.00 = C$1.3591 or C$1.00 = US$0.7358. On August [], 2020, the average daily exchange rate as reported by the Bank of Canada was US$1.00 = C$0.[] or C$1.00 = US$[].

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NOTICE TO SHAREHOLDERS OUTSIDE OF CANADA

Acreage is a corporation existing under the laws of the Province of British Columbia. Acreage has prepared this Circular in accordance with the disclosure requirements of Canadian and United States securities laws and the Amended Arrangement‎ is to be carried out in accordance with the laws of the Province of British Columbia. Shareholders should be aware that such requirements are different from those in other jurisdictions.

Shareholders who are not residents of Canada for purposes of the Tax Act should be aware that the disposition of securities pursuant to the Amended Arrangement‎ may have tax consequences both in Canada and in any applicable foreign jurisdiction in which the Shareholder is subject to tax. Such foreign tax considerations (other than U.S. federal income tax considerations) are not described herein. It is recommended that Shareholders consult their own tax advisors in this regard.

Information for U.S. Securityholders

The enforcement by Shareholders of civil liabilities under United States federal securities laws may be affected adversely by the fact that Acreage is organized under the laws of a jurisdiction outside the United States.

Neither the SEC nor any state securities regulatory authority has approved or disapproved the Proposal Agreement, the Amended Arrangement‎, passed upon the merits or fairness of the Amended Arrangement‎ or passed upon the adequacy or accuracy of the disclosure in this Circular. Any representation to the contrary is a criminal offense.

Certain United States Federal Income Tax Considerations of the Aggregate Amendment Option Payment

The U.S. federal income tax treatment of the Aggregate Amendment Option Payment‎ is unclear.  The Aggregate Amendment Option Payment‎ will be paid to the Shareholders, High Street Holders and USCo2 Holders in connection with the reduction of the Exchange Ratio and the modification of the terms of the Existing Canopy Option through the issuance of the Canopy Call Option and Floating Call Option under the Amended Plan of Arrangement. For U.S. federal income tax purposes, this payment may be treated as ordinary income, short-term capital gain, option premium that is part of an open transaction and not immediately includible in income, or other consideration paid in connection with modifying the Existing Arrangement. Acreage expects that the Aggregate Amendment Option Payment‎ would generally be treated as ordinary income. However, due to the absence of guidance bearing directly on the U.S. federal income tax consequences of the receipt of the Aggregate Amendment Option Payment‎, this expectation is not free from doubt. The Shareholders should consult their own tax advisors in regard to the tax consequences to them of the receipt of their share of the Aggregate Amendment Option Payment‎

Non U.S. Holders will generally be limited in their recognition of gain or income upon receipt of their share of the Aggregate Amendment Option Payment‎ and should consult with their own tax advisors to determine the extent that such income or gain will be recognized. For a summary of certain U.S. federal income tax consequences of the Amended Arrangement, including the payment of the Aggregate Amendment Option Payment, see “Certain United States Federal Income Tax Considerations”. Such summary is not intended to be legal or tax advice. Shareholders are urged to consult their own tax advisors with respect to the tax consequences to them of the Amended Arrangement in general and based on their particular circumstances.

The foregoing is a brief summary of the material United States federal income tax consequences only. Shareholders should read carefully the information in the Circular under the heading “Certain United States Federal Income Tax Considerations”, which qualifies the summary set forth above. Shareholders are urged to consult their own tax advisors to determine the particular tax consequences to them of the Amended Arrangement‎.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION

This Circular contains “forward-looking statements” within the meaning of the ‎United States Private Securities Litigation Reform Act of 1995 and “forward-looking information” ‎within the meaning of applicable Canadian securities legislation, including future-oriented financial information and financial outlook within the meaning of applicable Canadian securities legislation. Often, but not always, forward-‎looking statements and information can be identified by the use of words such as “plans”, ‎‎“expects” or “does not expect”, “is expected”, “estimates”, “intends”, “anticipates” or “does not ‎anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, ‎events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. ‎Forward-looking statements or information involve known and unknown risks, uncertainties and ‎other factors which may cause the actual results, performance or achievements of the Company or ‎its Subsidiaries to be materially different from any future results, performance or achievements ‎expressed or implied by the forward-looking statements or information contained in this Circular. Examples of such statements include statements with respect to the timing and ‎outcome of the Amended Arrangement; the intentions, plans and future actions of Canopy Growth and Acreage; the timing for the implementation of the Amended Arrangement‎; the anticipated benefits of the Amended Arrangement, including preserving Shareholder value and the potential upside of the Floating Shares; the likelihood of the Amended Arrangement‎ being completed; certain of the expectations of the Special Committee and the Acreage Board with respect to the potential future value of the Floating Shares; the amount of the up-front payment per Existing Share;  the occurrence or waiver (at the discretion of Canopy Growth) of the Triggering Event; the likelihood of the acquisition of the Existing SVS in ‎accordance with the terms of the Existing Arrangement; the satisfaction or waiver of the closing ‎conditions set out in the Arrangement Agreement; the satisfaction of the conditions set out in the ‎Proposal Agreement; the ability of the Company to complete certain financing transactions and complete the Non-Core Divestitures; the use of proceeds under the Debenture; the ability of Acreage to license the Trademarks, Systems and/or Intellectual Property resulting in increased royalty income; the expected consequences of limiting Acreage’s ability to operate to the Identified States; the expected benefits to Shareholders of the Hempco business; the expected use of the net proceeds of the Initial Advance to Hempco; the effects of the Existing Arrangement remaining in place; the timing and outcome of the Acquisition; the anticipated benefits of the Acquisition; the likelihood of entering into a Management Service Agreement; the ability of the Company to comply with the Initial Business Plan, including the Consolidated Adj. EBITDA Targets and the Pro-Forma Net Revenue Targets; and the potential tax consequences to Shareholders of the Amended Arrangement. To the extent any forward-‎looking information constitutes future-oriented financial information or financial outlook, such information is being provided to describe the Amended Arrangement, and readers are cautioned this information may not be appropriate for any other purpose, including investment decisions, and the reader should not place undue reliance ‎on such future-oriented financial information and financial ‎outlooks. The Company’s actual financial position ‎and results of operations may differ materially from management’s ‎current expectations and, as a result, ‎the Company’s revenue and earnings may differ materially from those targets contained in the Initial Business Plan, including the Consolidated Adj. EBITDA Targets and the Pro-Forma Net Revenue Targets. Such future-oriented financial information or financial outlook contained in this Circular ‎may not ‎be an indication of the Company’s actual financial position or results of operations.‎

Risks, uncertainties and other factors involved with forward-looking information could cause actual ‎events, results, performance, prospects and opportunities to differ materially from those expressed ‎or implied by such forward-looking information, including the occurrence of changes in U.S. ‎federal Laws regarding the cultivation, distribution or possession of marijuana; the ability of the ‎parties to receive, in a timely manner and on satisfactory terms, the necessary regulatory, court and ‎Shareholder approvals; the ability of the parties to satisfy, in a timely manner, the other conditions ‎to the completion of the Proposal Agreement; the occurrence or waiver (at the discretion of Canopy Growth) of the Triggering Event prior to the Canopy Call Option Expiry Date; the ability of Canopy Growth and the Company to satisfy, in a ‎timely manner, the Acquisition Closing Conditions; in the event that the Amended Arrangement is not implemented, the likelihood of completion of the ‎Acquisition on the terms of the Existing Arrangement; in the event that the Amended Arrangement is implemented, the likelihood ‎of Canopy Growth completing the acquisition of the Fixed Shares and/or Floating Shares; risks related to certain directors and executive officers of Acreage possibly having interests in the transactions contemplated by the Proposal Agreement and the Amended Arrangement‎ that are different from those of other Shareholders; risks relating to the possibility that holders of more than 5% of the Existing Shares may exercise their right to dissent; other ‎expectations and assumptions concerning the transactions contemplated between Canopy Growth ‎and the Company; the available funds of the Company and the anticipated use of such funds; the ‎availability of financing opportunities for the Company and the risks associated with the ‎completion thereof; regulatory and licensing risks; changes in general economic, business and ‎political conditions, including changes in the financial and stock markets; risks related to infectious ‎diseases, including the impacts of the COVID-19; legal and regulatory risks inherent in the ‎cannabis industry, including the global regulatory landscape and enforcement related to cannabis, ‎political risks and risks relating to regulatory change; risks relating to anti-money laundering Laws; ‎compliance with extensive government regulation and the interpretation of various Laws regulations ‎and policies; risk associated with divesting certain assets; public opinion and perception of the ‎cannabis industry; and such other risks set forth under the heading “Risk Factors” below and those contained in the public filings of the Company filed with ‎Canadian Securities Regulators and available under the Company’s profile on SEDAR at ‎www.sedar.com and with the SEC and available on ‎EDGAR at www.sec.gov/edgar, including the Acreage Annual Report.‎

In respect of the forward-looking statements and information concerning the anticipated benefits ‎and completion of the Amended Arrangement and the anticipated timing for completion of the ‎Amended Arrangement, the Company has provided such statements and information in reliance on ‎certain assumptions that the Company believes are reasonable at this time. Although the Company ‎believes that the assumptions and factors used in preparing the forward-looking information or ‎forward-looking statements in this Circular are reasonable, undue reliance should not ‎be placed on such information and no assurance can be given that such events will occur in the ‎disclosed time frames or at all. The forward-looking information and forward-looking statements ‎included in this Circular are made as of the date of this Circular and ‎the Company does not undertake any obligation to publicly update such forward-looking ‎information or forward-looking information to reflect new information, subsequent events or ‎otherwise unless required by applicable Securities Laws. There can be no assurance that the ‎Acquisition, the Amended Arrangement, the occurrence or waiver (at the discretion of Canopy Growth) of the Triggering Event or the acquisition ‎of the Fixed Shares and/or the Floating Shares will occur, or that such events will occur on the ‎terms and conditions contemplated in this Circular. The Proposal Agreement, the Arrangement Agreement or the Amended Arrangement could be ‎modified, restructured or terminated. Forward-looking information is information about the future and is inherently uncertain. There can be no assurance that the ‎forward-looking information will prove to be accurate. Actual results could differ materially from those reflected in the ‎forward-looking information as a result of, among other things, the matters set out or incorporated by reference in this ‎Circular generally and economic and business factors, some of which may be beyond the control of the Company. Some of ‎the more important risks and uncertainties that could affect forward-looking information are described further under the ‎heading “Risk Factors”. Additional risks are discussed in the Acreage Annual Report, a copy of which is ‎available under the Company’s profile on SEDAR at www.sedar.com and on EDGAR at www.sec.gov/edgar. The Company expressly ‎disclaims any intention or obligation to update or revise any information contained in this Circular (including forward-‎looking information) except as required by applicable Laws, and Shareholders should not assume that any lack of update to ‎information contained in this Circular means that there has been no change in that information since the date of this ‎Circular and should not place undue reliance on forward-looking information.‎

GLOSSARY OF TERMS

In this Circular and accompanying Notice of Meeting, unless there is something in the subject matter inconsistent therewith, the following terms shall have the respective meanings set out below, words importing the singular number shall include the plural and vice versa and words importing any gender shall include all genders.