Canopy Growth Corp (NYSE: CGC)'s $3.4-billion proposed acquisition of U.S. multistate cannabis operator Acreage Holdings Inc (OTC: ACRGF) will position the company for the "next wave" of cannabis, Canopy co-founder and CEO Bruce Linton told CNBC's Jim Cramer.

What He Said

Canopy's rationale for acquiring Acreage is to merge shared operations, brands and intellectual properties, Linton said on Cramer's "Mad Money" show Thursday.

The timing of the merger comes ahead of what could prove to be a large shift in the cannabis industry in the next 18-24 months, he said.

"That's just enough time to use all of our IP and brands to really get ahead," Linton told Cramer.

Canopy's acquisition of Acreage also comes with an all-star board of directors, highlighted by ex-Speaker of the House John Boehner and former Canadian Prime Minister Brian Mulroney.

This lends confidence that Acreage's U.S.-focused business will "behave ethically," Linton said.

Why It's Important

The legal cannabis business was created on the heels of an illicit black market industry, Acreage CEO Kevin Murphy also said during the interview.

Acreage's philosophy was that bringing in top executives isn't sufficient — the company needs to be backed by recognizable leaders who "believe in the movement," he said.

"They believe in the value of the plant, but they also believe in good governance, or they wouldn't have joined our company in the first place."

As soon as there is a high degree of "social consumption," cannabis products will become more mainstream, especially among major brands who are "already looking at the space," Murphy said. For now, major brands are "pensive" but are more likely to reach out to the "right company" backed by high-ranking politicians, he said.

Linton said major brands can't afford to "look stupid" in partnering with the wrong cannabis company.

To counter this, he said Canopy and Acreage are backed by board members like Boehner who help "keep stupid away."

Canopy Growth's stock traded around $40.17 per share at time of publication.

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