The marijuana industry has seen more attention than ever from the investing community this year, and major players in the cannabis space have been jockeying for position to take advantage of prevailing trends that look increasingly favorable for future growth. In particular, although the U.S. market remains closed to legal sales of cannabis, moves like the recent passage of the U.S. farm bill legalizing hemp products appear to be opening a window that could eventually lead to full legalization in the not-too-distant future.

Canopy Growth (CGC -1.36%) has been one of the most aggressive Canadian cannabis companies in seeking to prepare to enter the U.S. marijuana market, with big investments including a planned hemp facility in upstate New York. Yet the pot player upped the ante last week with its acquisition of an option to purchase U.S.-based Acreage Holdings (ACRGF). Canopy's stock has soared in the aftermath of the deal, but based on its own share-price response, Acreage Holdings could be shaping up to be a surprise loser.

How the deal got done

The structure of the Canopy-Acreage deal was unusual because of the restrictions on Canopy's ownership of U.S. marijuana operations. Specifically, Canopy's listing on the New York Stock Exchange prevents it from taking direct control of Acreage Holdings as long as marijuana remains illegal at the federal level.

Person wearing Tweed-branded shirt and clear hairnet working with a cannabis plant.

Image source: Canopy Growth.

To accomplish the same goal without running afoul of those regulations, Canopy obtained an option rather than doing an outright purchase of Acreage. Under its terms, Canopy will pay $300 million to Acreage now. Later on, if the U.S. makes marijuana legal within a specified time frame, then Acreage shareholders will receive 0.5818 shares of Canopy stock for every Acreage share they own. That yields a total potential value of $3.4 billion based on recent prices, and it represents a premium of more than 40% compared to where Acreage shares traded prior to the announcement.

The rise and fall of Acreage shares

As you'd expect when the deal got announced, Acreage shares rose substantially. However, what's decidedly unusual is that in the days after the announcement, Acreage gave up much of those gains -- even as Canopy shares continued to gain ground.

CGC Price Chart

CGC Price data by YCharts.

Based on current prices of $48.50 per share for Canopy, just the stock component of the deal alone should put the value of Acreage stock above $28 per share. Yet at a price of just $22 per share, Acreage trades at a more than 20% discount to the implied price under the deal.

Losing optionality

Acreage Holdings' share-price discount seems to reflect skepticism about whether the deal will eventually get done at all. Under the agreement's terms, the parties are bound for up to 90 months until U.S. legalization occurs. Only after that -- in the second half of 2026 -- would Canopy and Acreage be free to walk away from the deal.

Most of those writing about the agreement seem convinced that legalization will happen sooner rather than later. Efforts to allow state decisions on marijuana to supersede federal law through the passage of the STATES Act appear to be gaining steam, and bipartisan support for the measure could eventually provide a pathway toward allowing cannabis companies to have U.S. operations freely in jurisdictions that have legalized marijuana for medical or recreational purposes.

Yet banking on Washington to get anything done in a timely manner is often foolhardy, and in the meantime, Acreage will lose much of its ability to pursue its own strategic vision. The Canopy deal allows Acreage to make its own acquisitions to a limited extent, but only under defined parameters. Moreover, with the need to get shareholder approval, it's far from certain that a Canopy-Acreage tie-up will ever actually come to fruition.

It's not a sure thing

Canopy Growth investors are excited about the potential acquisition of what could become a key part of the cannabis giant's international strategy. Yet the fact that Acreage Holdings isn't seeing the same share-price gains points to some uncertainty about just how good the deal will be for its own shareholders. Cannabis investors shouldn't count on a Canopy-Acreage deal before the two companies successfully jump through all the hoops to make it a reality -- and get the cooperation from U.S. lawmakers that they'll need along the way.