Canopy Growth Announces Financing to Further Strengthen Balance Sheet

Published: May 7, 2024

Canopy Growth Announces Financing to Further Strengthen Balance Sheet

Canopy Growth Corporation, announced that on May 2, 2024, it entered into an exchange and subscription agreement with a single institutional investor pursuant to which Canopy Growth is expected to receive gross proceeds of approximately US$50 million and exchange approximately C$27.5 million of existing debt maturing in September 2025 for a new senior unsecured convertible debenture of the Company (the “Convertible Debenture”) maturing five years from the date of issuance thereof (such issuance date being, the “Closing Date”).

Pursuant to the terms of the Agreement, on the Closing Date, the Investor will acquire a Convertible Debenture in an aggregate principal amount equal to C$96,358,375 and the Company will issue to the Investor an additional 3,350,430 common share purchase warrants of the Company (each, a “Warrant”). Each Warrant will entitle the holder to acquire one common share (each, a “Common Share”) of the Company at an exercise price equal to C$16.18 per Common Share for a period of five years from the Closing Date. The Convertible Debenture will bear interest at a rate of 7.50% per annum, payable in semi-annual payments in cash or, at the option of the Company, in Common Shares for the first four semi-annual interest payments after the Closing Date, subject to satisfaction of certain conditions, including the prior approval of the Toronto Stock Exchange (the “TSX”).

The Convertible Debenture will be convertible into Common Shares at the option of the Investor at a conversion price equal to C$14.38 per Common Share, being the Canadian dollar equivalent of the average Nasdaq Official Closing Price of the Common Shares for the five trading days immediately preceding the signing of the Agreement. The Convertible Debenture will be subject to a forced conversion feature upon notice from the Company in the event that the average closing trading price of the Common Shares on the TSX exceeds C$21.57 for a period of 10 consecutive trading days.

The Company does not plan to list the Convertible Debenture or the Warrants on the TSX, NASDAQ, or any other securities exchange or other trading system. The Company intends to use the net proceeds from the offering for working capital and general corporate purposes.

The closing of the offering pursuant to the Agreement is expected to occur during the week of May 6, 2024, subject to customary closing conditions. On the Closing Date, the Company will enter into a registration rights agreement with the Investor pursuant to which the Company will agree to file a registration statement with the U.S. Securities and Exchange Commission (the “SEC”) within 45 days of the Closing Date covering the resale of the Common Shares underlying the Convertible Debenture and the Warrants.

The offer and sale of the foregoing securities are being made in a transaction not involving a public offering and the securities have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or applicable state securities laws. Accordingly, the securities may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws.

This news release shall not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.

About Canopy Growth
Canopy Growth is a leading North American cannabis and consumer packaged goods (“CPG”) company dedicated to unleashing the power of cannabis to improve lives. Through an unwavering commitment to our consumers, Canopy Growth delivers innovative products with a focus on premium and mainstream cannabis brands including Doja, 7ACRES, Tweed, and Deep Space. Canopy Growth’s CPG portfolio features gourmet wellness products by Martha Stewart CBD, and category defining vaporizer technology made in Germany by Storz & Bickel. For more information visit