Licensed cannabis producer Canopy Growth is preparing for its expansion in the U.S., announcing a deal to acquire Acreage Holdings.

The deal, valued at $3.4 billion USD, is conditional on the U.S. legalizing cannabis for recreational use at the federal level, at which point Canopy will acquire all of Acreage’s shares. In the meantime, both companies will continue to operate independently.

While individual states in the U.S. have legalized recreational cannabis, it remains prohibited at the federal level. The Toronto Stock Exchange, where Canopy has long traded under the WEED stock symbol, has a rule prohibiting issuers from owning or acquiring assets in jurisdictions where cannabis isn’t legal. Canopy Growth said in today’s announcement that the U.S. remained “the only relevant market” where it did not have a major presence.

Bruce Linton, chairman and co-CEO of Canopy Growth, said in today’s announcement that it is “a complex transaction with a simple objective”: establishing an entrance strategy into the U.S. market, as soon as “a federally-permissible pathway exists.” The company will continue to establish its hemp operations in New York, which were announced earlier this year after a bill legalized the production and cultivation of hemp and hemp-derived products.

The deal also includes a licensing agreement giving Acreage access to Canopy Growth’s brands and other intellectual property – such as Tweed, Doja and Tokyo Smoke – setting them up for expansion south of the border as well.

Canopy Growth is already the largest cannabis company in both Canada and the world, but the acquisition sets it up to have a strong foothold in the U.S. the moment it is legally able to do so. Acreage is one of the largest cannabis companies based in the U.S., with a market value of about $2.6 billion USD. It has 87 dispensaries and 22 cultivation and processing sites across 20 states and launched a chain of retail stores called The Botanist last year.

The deal also remains subject to approval from shareholders in both companies, as well as the Supreme Court of British Columbia.

A bipartisan group put forth legislation in the U.S. earlier this month to end the federal prohibition of marijuana in America. Politico reported that current U.S. President Donald Trump has “suggested that he’s open to some form of legalization,” and may become a subject in the lead up to next year’s election.