SecProbe.io

CORRESP
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filename1.htm

January 17, 2023
Kevin J. Roggow

VIA EDGAR
Direct Phone
212-908-1294

Direct Fax
646-461-2045

kroggow@cozen.com

U.S. Securities and Exchange Commission
 Division of Corporation Finance
 Office of Trade & Services
 100 F Street, N.E.
 Washington, D.C. 20549

 Attention: Jennie Beysolow

    Lilyanna Peyser

 Re: Acreage Holdings, Inc.

Preliminary Proxy Statement on Schedule 14A

Filed December 14, 2022

File No. 000-56021

Dear Ms. Beysolow:

We are in receipt of the comments of the staff (the “Staff”)
of the Division of Corporation Finance (the “Division”) of the U.S. Securities and Exchange Commission (the “SEC”)
set forth in its letter, dated January 6, 2023, with respect to the above-referenced Preliminary Proxy Statement on Schedule 14A (the
 “Preliminary Proxy Statement”). We are responding to the Staff’s comments on behalf of Acreage Holdings, Inc.
(“Acreage”) as set forth below.

Simultaneously with the submission of this letter, Acreage is
publicly filing via EDGAR an Amendment No. 1 to the Preliminary Proxy Statement (the “Amendment No. 1”)
responding to the Staff’s comments and updating the Preliminary Proxy Statement.

For the Staff’s convenience, the text of the Staff’s comments
are set forth below in italics, followed by the Acreage’s responses. All terms used but not defined herein have the meanings assigned
to such terms in the Amendment No. 1.

Preliminary Proxy Statement on Schedule 14A filed on December
14, 2022

General

 1. It does not appear that you can incorporate by reference the information about Canopy Growth Corporation that is required by Item
14(c)(1) of Schedule 14A and Part B of Form S-4 pursuant to Item 11 of Form S-4, as Canopy’s Form 10-K for the fiscal year ended
March 31, 2022 was filed one day late, resulting in Canopy not meeting the requirements of General Instruction I.A. of Form S-3. Accordingly,
please revise to remove the incorporation by reference of Canopy’s filings and confirm that all information required by Item 14(c)(1)
of Schedule 14A and Part B of Form S-4 is included in this filing. Alternatively, please tell us why you believe that Canopy is eligible
to incorporate by reference. Please also include the required pro forma financial information.

Response: Acreage respectfully submits that it is permitted
to incorporate by reference the information about Canopy Growth Corporation (“Canopy”) that is required by Item 14(c)(1)
of Schedule 14A and Part B of Form S-4 pursuant to Item 11 of Form S-4. Canopy meets the eligibility requirements of Form S-3, and specifically
General Instruction I.A of Form S-3. Specifically in reference to the Canopy’s Form 10-K for the fiscal year ended March 31, 2022,
Acreage respectfully submits that such Form 10-K was timely filed on May 31, 2022. Canopy’s Form 10-K was due within 60 days from
its fiscal year end, however as such date, May 30, 2022, was a holiday, in accordance with Rule 0-3(a) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), the filing due date was May 31, 2022.

Acreage further respectfully submits that pro forma financial information
for Canopy is not required under Rule 3-05 and Article 11 of Regulation S-X. Canopy undertook the requisite significance analysis by aggregating
(i) the contemplated acquisitions of Acreage, Wana and Jetty (whose individual significance is each below the 50% significance threshold)
with (ii) Canopy’s recently consummated $19.5 million acquisition of certain assets of Flow Beverages, Inc. (“Flow”)
(which is Canopy’s only consummated acquisition since the beginning of Canopy’s current fiscal year), and determined that
those individually insignificant acquisitions did not exceed the 50% significance threshold on an aggregate basis with respect to each
of the “investment test,” the “asset test” and the “income test” (collectively, the “Significance
Tests”). The results of the Significance Tests, as disclosed in Canopy’s correspondence with the Staff, filed
December 12, 2022, are summarized below:

    Entity

    Investment
    (%)

    Assets (%)

    NIBT (%) [A]

    Revenue (%)
    [B]

    Income Test
    Result (Lower of [A] or [B])

    Acreage
    15.43%
    10.95%
    21.01%
    45.39%
    21.01%

    Wana
    17.60%
    1.72%
    8.86%
    12.02%
    8.86%

    Jetty
    5.19%
    0.24%
    0.25%
    3.69%
    0.25%

    Flow
    1.43%
    0.43%
    1.28%
    1.47%
    1.28%

    Aggregate
    39.65%
    13.34%
    31.40%
    62.57%
    31.40%

 2. For each method of analysis in the Eight Capital Fairness Opinion received by the Special Committee and the Canaccord Genuity Fairness
Opinion received by the Board, please revise to provide additional disclosure about the valuation analysis, the underlying data used in
the analysis, and the conclusions drawn by Eight Capital or Canaccord Genuity with respect to the analysis. For example, disclose whether
there were high, low, average or median values calculated; identify and include information about the relevant companies considered in
the comparable analysis; disclose material financial information and projections that the parties provided and that were used in the discounted
cash flow analysis, in rendering the opinions and as referenced in “Other Considerations”; and disclose the data that supports
the quantitative and qualitative factors noted as key considerations and conclusions of Eight Capital and Canaccord Genuity.

Response: Acreage has revised the disclosure on pages
56 through 63 in response to the Staff’s comments.

 3. Please revise the Risk Factors subsection on pages 21-22, the Questions and Answers about the Floating Share Arrangement and the
Meeting section, and the disclosure of risks on pages 52-54 to discuss the risks to Acreage shareholders, including the impact on them
if the benefits of the Floating Share Arrangement are not realized, given that cannabis remains federally illegal in the U.S. These risks
should include a discussion of whether Canopy’s securities could be delisted from the Nasdaq Global Select Market and the resultant
consequences to Acreage shareholders. Also discuss any risks arising from Nasdaq’s objection to Canopy’s decision to consolidate
the financial results of Canopy USA. Similarly, revise the relevant risk factors in the Risk Factors section beginning on page 94 to expand
upon these risks.

      2

Response: Acreage has revised the disclosure on pages
iv, 21, 55 and 100-101 in response to the Staff’s comments.

 4. Please disclose the anticipated aggregate consideration to be received by your stockholders pursuant to the Floating Share Arrangement,
or tell us why such disclosure is unnecessary. Disclose the terms of the 2019 arrangement and 2020 amended arrangement between you and
Canopy, or tell us why such disclosure is unnecessary.

Response: Acreage has revised the disclosure on pages
i, 5,  41, and 44 in response to the Staff’s comments.

 5. Please provide us with your analysis as to whether the transactions described in your filing constitute a going-private transaction
pursuant to Rule 13e-3.

Response: After careful consideration of the applicability
of Rule 13e-3 (“Rule 13e-3”) under the Exchange Act, including, without limitation, the Division’s guidance in
the Going Private Transactions, Exchange Act Rule 13e-3 and Schedule 13E-3 Compliance and Disclosure Interpretations (“Rule 13e-3
C&DI”) and the Interpretive Release Relating to Going Private Transactions under Rule 13e-3 (Release No. 31-17719, April
13, 1981) (the “Interpretive Release”), Acreage respectfully submits that it has determined that the proposed transaction
(the “Floating Share Arrangement”) pursuant to the arrangement agreement (the “Floating Share Arrangement
Agreement”) among Acreage, Canopy and Canopy USA, LLC (“Canopy USA”) does not constitute a “Rule 13e-3
transaction” within the meaning of Rule 13e-3. Further, Acreage respectfully submits that in the event the Staff disagrees with
such determination, Rule 13e-3 would still not apply to the Floating Share Arrangement because Acreage would be entitled to rely on the
exception to Rule 13e-3 provided for in Rule 13e-3(g)(2).

 A. Overview of Rule 13e-3

A “Rule 13e-3 transaction” is defined as including, among
other things, (i) a purchase of any equity security by the issuer of such security or by an affiliate of such issuer, or (ii) a solicitation
subject to Regulation 14A of any proxy, consent or authorization of, any equity security holder by the issuer of the class of securities
or by an affiliate of such issuer, in connection with a merger, consolidation, reclassification, recapitalization, reorganization or similar
corporate transaction of an issuer or between an issuer and its affiliate, which, in either case, has a reasonable likelihood or a purpose
of producing, either directly or indirectly, any of the effects described in Rule 13e-3(a)(3)(ii), including, among other things, causing
any class of equity securities of the issuer that is subject to Section 12(g) or Section 15(d) of the Exchange Act to become eligible
for termination of registration, or causing any class of equity securities of the issuer that is listed on a national securities exchange
to no longer be listed.

 B. Applicability of Rule 13e-3 to the Floating Share Arrangement

Acreage respectfully submits that the Floating Share Arrangement does
not constitute a “Rule 13e-3 transaction” within the meaning of Rule 13e-3. Specifically, Acreage has determined that (i)
neither Canopy nor Canopy USA is an “affiliate” of Acreage within the meaning of Rule 13e-3, (ii) Acreage’s named executive
officers and other executive officers (collectively, the “Management Parties”) are not “engaged in” the
transaction and are not affiliates of Canopy or Canopy USA who exerted control or influence on the transaction process, and (iii) the
Floating Share Arrangement does not raise the concerns that Rule 13e-3 was intended to address because the Floating Share Arrangement
is being completed by way of a court-approved plan of arrangement that resulted from arm’s-length negotiations with Canopy, in a
process overseen by a special committee of the board of directors of Acreage (the “Special Committee”) and financial
advisors and outside legal counsel, and is subject to approval by the holders (the “Floating Shareholders”) of Acreage’s
issued and outstanding Class D subordinate voting shares (the “Floating Shares”) at a special meeting of the Floating
Shareholders (the “Special Meeting”). Acreage’s analysis is more fully described below.

      3

 i. Neither Canopy nor Canopy USA is an affiliate of Acreage

An “affiliate” of an issuer is defined in Rule 13e-3 as
 “a person that directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control
with such issuer.” Rule 12b-2 under the Exchange Act defines “control” to mean “the possession, direct or indirect,
of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities,
by contract or otherwise.” Under this definition and the Division’s related guidance, the determination of “control,”
which is fundamental to the concept of “affiliate” as defined in Rule 13e-3, is dependent upon specific facts and circumstances.

The Division has explained in the Interpretive Release that the existence
of a control relationship for purposes of Rule 13e-3 “does not turn solely upon the ownership of any specific percentage of securities.
Rather, the question is whether there is the ability, directly or indirectly, to direct or cause the direction of the management and policies”
of the issuer. In the present case, the transaction was negotiated on an arm’s-length basis and neither Canopy nor Canopy USA has
any stock ownership, representation on Acreage’s board of directors (the “Board”), or relationships with the
Management Parties that would afford Canopy or Canopy USA the requisite ability to direct Acreage’s management or policies so as
to render Canopy or Canopy USA an “affiliate” within the meaning of Rule 13e-3. Canopy does have contractual relationships
with Acreage pursuant to (1) the Existing Arrangement Agreement and (2) a loan (the “Hempco Loan”) issued by an affiliate
of Canopy to Universal Hemp, LLC, an affiliate of Acreage (“Universal Hemp”), but Acreage does not believe such relationships
render Canopy or Canopy USA an “affiliate” within the meaning of Rule 13e-3.

 a. Stock ownership

Neither Canopy nor Canopy USA beneficially own any Floating Shares,
Fixed Shares or other equity interests of Acreage. Pursuant to the Existing Arrangement Agreement,
which was reviewed and approved by the Supreme Court of British Columbia and approved by the shareholders of Acreage, upon the occurrence,
or waiver, of a Triggering Event, Canopy, will, subject to the satisfaction or waiver of certain closing conditions set out in the Existing
Arrangement Agreement: (1) acquire all of the issued and outstanding Fixed Shares on the basis of the Fixed Exchange Ratio and (2) have
the right (but not the obligation) to acquire all of the issued and outstanding Floating Shares. In accordance with the terms of the Floating
Share Arrangement, Canopy irrevocably waived its option to acquire the Floating Shares pursuant to the Existing Arrangement Agreement.
As of the date hereof, no Triggering Event or waiver thereof has occurred.

 b. Absence of board representation

The Board is currently comprised of nine members. Five of the nine
directors are considered to be independent under Canadian Securities Administrators guidelines, including, National Instrument 58-101
- Disclosure of Corporate Governance Practices (“NI 58-101”) and National Policy 58- 201 - Corporate
Governance Guidelines (“NP 58-201”, and together with NI 58-101, the “CSA Guidelines”). The
directors who are independent are Brian Mulroney, Douglas Maine, Katie J. Bayne, Patricia Lopez and Steven Strom. Peter Caldini, Kevin
Murphy and William C. Van Faasen are not independent, given that each of them have previously served and received compensation as the
Chief Executive Officer of Acreage during the past three years, and Mr. Boehner is not independent because he received more than C$75,000
in direct compensation from High Street for advisory services and related matters within a twelve month period during the past three years.

      4

Pursuant to the Existing Arrangement Agreement, Canopy does have certain
rights with respect to the nomination of persons to serve as directors on the Board, but such rights are not exercisable until the Acquisition
Effective Time, at which point Canopy would own approximately 70% of the issued and outstanding shares of Acreage and, at that time, Canopy
would be an affiliate of Acreage. Therefore, at present, no directors on the Board have been nominated or appointed by Canopy or Canopy
USA. Finally, no member of the Board has had any affiliation or relationship with Canopy, Canopy USA or any of their affiliates.

 c. Arm’s-length process

As described under “The Floating Share Arrangement—Background
to the Floating Share Arrangement” section of the Preliminary Proxy Statement, the Floating Share Arrangement was the result
of a comprehensive, arm’s-length negotiation between Acreage and Canopy in consultation with the Special Committee, all of whom
are independent, and none of whom have or have had any connections to or affiliations with Canopy or Canopy USA.

Given the process that was followed by Acreage’s management,
the Board and the Special Committee (advised by independent financial advisors and outside legal counsel), the Floating Share Arrangement
did not and does not present the opportunity for the type of abuse or coercion of shareholders that Rule 13e-3 is intended to mitigate.

 d. Prior contractual relationships

As disclosed in the Preliminary Proxy Statement and the documents incorpora