A mairjuana plant in Edmonton, Alberta, Canada. Photo by Artur Widak/NurPhoto via Getty Images

Canadian cannabis company Canopy Growth, which is 38% owned by beer and spirits company Constellation Brands, bought the right to acquire Acreage Holdings only if recreational marijuana is legalized in the U.S.

The big picture: The tie-up between the U.S. company that grows and sells pot in a handful of states — former Speaker of the House John Boehner is on the board — and the world’s most valuable pot company is essentially a bet on the future that’s valued at $3.4 billion dollars.

Between the lines: The non-deal deal is structured to avoid obstacles that would come with Canopy’s outright acquisition of Acreage before legalization. A deal now would get Canopy’s shares de-listed from the Toronto and New York Stock Exchange, which both forbid listing companies with U.S. cannabis operations since it’s federally illegal. (Canada made marijuana fully legal nationwide in October.)

  • “This is like a very large game of double dutch, as in ‘if the rules change we'll come play, but until then we'll keep spinning those ropes.’ It's a waiting match,” Brent Williams, founder of Highwater Financial, a cannabis-focused investment firm, tells Axios.
  • “It’s a great precedent to set for the Aurora Cannabis's of the world to come in for further expansion of Canadian companies into the U.S.”

How it works: The deal is terminated if cannabis is not legalized (or if exchanges don't change their rules) within 7.5 years, or 90 months. If the deal falls through, no word on what happens to the $300 million upfront cash Canopy agreed to pay Acreage shareholders.

  • But the heads of both companies and many analysts are optimistic legislation will pass within the next 2 or 3 years.
  • The companies said the deal value was a 41% premium over Acreage's share price.

What’s in it for the companies:

  • “Canopy has been at risk of missing out on the U.S. market as it grows. Now they have sort of secured a path towards that, while avoiding an outright acquisition today," Rob Wertheimer, a founding partner of Melius Research, tells Axios. “Acreage is attached to what has become an emerging North American leader and that’s well-positioned for growth.”

The bottom line: This just built a path for companies to buy into a budding U.S. marijuana market without breaking any laws and without facing the wrath of stock exchanges. Analysts say the deal structure could set off a wave of similar transactions.

Go deeper: 4/20 sells high: Corporate America embraces marijuana's big day

Go deeper

Biden: The next president should decide on Ginsburg’s replacement

Joe Biden. Photo: Drew Angerer / Getty Images

Joe Biden is calling for the winner of November's presidential election to select Ruth Bader Ginsburg's replacement on the Supreme Court.

What he's saying: "[L]et me be clear: The voters should pick the president and the president should pick the justice for the Senate to consider," Biden said. "This was the position the Republican Senate took in 2016 when there were almost 10 months to go before the election. That's the position the United States Senate must take today, and the election's only 46 days off.

Trump, McConnell to move fast to replace Ginsburg

Photo: Alex Wong/Getty Images

President Trump will move within days to nominate his third Supreme Court justice in just three-plus short years — and shape the court for literally decades to come, top Republican sources tell Axios.

Driving the news: Senate Majority Leader Mitch McConnell and Senate Republicans are ready to move to confirm Trump's nominee before Election Day, just 46 days away, setting up one of the most consequential periods of our lifetimes, the sources say.

Updated 8 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 10 p.m. ET: 30,393,591 — Total deaths: 950,344— Total recoveries: 20,679,272Map.
  2. U.S.: Total confirmed cases as of 10 p.m. ET: 6,722,699 — Total deaths: 198,484 — Total recoveries: 2,556,465 — Total tests: 92,163,649Map.
  3. Politics: In reversal, CDC again recommends coronavirus testing for asymptomatic people.
  4. Health: Massive USPS face mask operation called off The risks of moving too fast on a vaccine.
  5. Business: Unemployment drop-off reverses course 1 million mortgage-holders fall through safety netHow the pandemic has deepened Boeing's 737 MAX crunch.
  6. Education: At least 42% of school employees are vulnerable.