Canopy Growth Corp. (CGC) - Get Canopy Growth Corporation Report  confirmed plans to buy U.S.-based Acreage Holdings (ACRGF)  Thursday once and if cannabis is made federally legal in the United States in a deal that values the group at around $3.4 billion.

The deal would give Canada-based Canopy 100% ownership of Acreage and value the New York, NY-based group at around $3.4 billion. If completed and approved by shareholders, Acreage investors would be paid $2.55 per share upfront, valued at $300 million and a further consideration of 0.5818 Canopy shares once the deal is completed. The deal would also give Acreage access to Canopy's intellectual property and marketing in a move to drive growth in a business that already has licenses or agreements in 19 U.S. states.

"From the first day we created our company, providing exceptional customer care and delivering shareholder value have been our top priorities. This transaction will help accomplish both," said Acreage CEO Kevin Murphy. "When the right is exercised having access to Canopy Growth's deep resources will enable us to innovate, develop and distribute quality cannabis brands across the U.S. and continue expanding our U.S. footprint."

"At the same time, a confluence of factors are making it much more difficult for a multi-state operator to achieve its full potential, including the enormous amount of cash required to scale," he added. "Our Board of Directors, management team and I are pleased to deliver significantly increased liquidity to our shareholders and put ourselves in an even stronger position to deliver continued and significant upside."

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Canopy Growth shares surged 7.26% at the start of trading Thursday to change hands at $45.92 each, a move that would extend the stock's year-to-date gain to around 60%. Acreage Holdings rose 10.7% to $24.89 each on the Canadian Securities Exchange C$1 billion.

"Today we announce a complex transaction with a simple objective. Our right to acquire Acreage secures our entrance strategy into the United States as soon as a federally-permissible pathway exists," said Canopy Growth CEO Bruce Linton. "By combining Acreage's management team, licenses and assets with Canopy Growth's intellectual property and brands, there will be tremendous value creation for both companies' shareholders."

Earlier this week, Canopy Growth expanded European footprint with an all-cash purchase of Cafina, a Spain-based cannabis producer licensed to cultivate, distribute and export marijuana for medical and research purposes in the region's fourth-largest economy.

Canopy is adding Cafina's 1,600-square-foot greenhouse to its existing 430,000-square-foot licensed production site in Denmark, as well as its facility in Germany, the company said, and will retain CEO Xavier Delas Martinez to manage Cafina's site as Canopy injects capital in order to scale the operation through the year.