ACRGF - Acreage Holdings: Canopy Growth Target Needs A Payday Loan

Source: Acreage Holdings.

On Monday, Acreage Holdings (OTCQX:ACRGF) announced an odd funding transaction: Selling $11 million of convertible debt at below par value with a conversion price well below market rates. This isn't Acreage's first unusual funding transaction, as their February $100 million funding round also was difficult to understand.

To make sense of this transaction, I break down what occurs in a reasonable scenario where the investor cashes in their convertible debt for shares and Acreage repays the loan before it all becomes an extremely cheap stock offering. In that scenario, Acreage