The deal everyone in the North American cannabis industry has been watching just saw a major update this morning.

After a series of rumours tweeted via outlets like Bloomberg leaked the news early, Ontario-based Canopy Growth Corporation (TSX: WEED; NYSE: CGC) confirmed its bid this past April to acquire one of the largest U.S. cannabis companies. 

If it goes through, that deal will see Acreage Holdings (CSE: ACRG.U; OTC: ACRGF) coming under the Canopy Growth banner, creating what will likely be the largest international cannabis operation between North American growers. 

Before the planned acquisition could move into the next phase, shareholder approval from both companies was required. That key vote just took place after a media blitz from the CEOs of both Acreage and Canopy urging their respective company shareholders to vote in favour of the deal. 

The last-minute reminder messages and video clips answering questions about the proposed deal appear to have paid off, as this morning both cannabis producers announced shareholder approval was acquired by large margins. 

An approximate 97% of Acreage shareholders cast their ballot in favour of the deal by the special shareholder meeting deadline, while Canopy reported an approval margin of 99%. Acreage Chief Executive Officer Kevin Murphy commented: 

I could not be more pleased with the overwhelming support displayed. This is a clear referendum by our shareholders on the enormous benefits of the arrangement with Canopy Growth, and I would like to thank all shareholders for their continued support.

While that hurdle is out of the way, there remains one major regulatory issue to be overcome before the acquisition actually takes place. 

The terms of the deal that shareholders voted on include the option for Canopy to buy Acreage after U.S. federal law is amended to remove regulations regarding the “general cultivation, distribution and possession” of marijuana. 

Effectively, that means Canopy has the right to acquire all of Acreage’s shares as soon as marijuana is either fully legalized nationwide in the U.S., or removed from the current Schedule I classification that labels it as a “drug with no currently accepted medical use and a high potential for abuse.” 

Recreational cannabis may be legal in Canada, but at the moment laws vary by state in the U.S., with a recent legalization effort in New York stalling out and failing today. Currently, cannabis usage is illegal at the federal level, while medical use is permitted in 33 states and recreational use is now legal in 11 states.