Canopy Growth Announces Strategic Recapitalization Transactions Significantly Strengthening Balance Sheet to Support Growth Strategy

Executive Summary

• Canopy Growth entered into a $150 million US term loan (net proceeds) and exchanged C$96.4 million of existing convertible debentures for new C$55 million debentures, cash, common shares and warrants, extending all debt maturities to as early as January 2031.
• The transactions will leave the company with approximately C$425 million in cash on hand, strengthening liquidity and providing runway through 2031 for working capital, acquisitions and strategic growth.
• New financing includes issuance of 18.7 million loan‑related common share purchase warrants (US$1.30 exercise) and 12.7 million investor warrants (C$2.16 exercise), with registration rights agreements filed for the underlying securities.

Key Details

• Term Loan:
• Gross principal ≈ US$162 million (includes original issue discount).
• Net proceeds: US$150 million.
• Maturity: January 2031.
• Interest rate: Term SOFR + 6.25% (floor 3.25%).
• Use of proceeds: repay ~US$101 million senior secured debt due Sep 2027, working capital/general corporate purposes, potential acquisitions.

• Monthly interest payments; pre‑payment fees include make‑whole interest and an exit fee ≈ US$6.5 million (prorated for partial repayments).

• Convertible Debenture Exchange:

• Existing debentures exchanged: C$96.4 million (due May 2029).

• New securities issued:

  • C$55 million new convertible debentures, due July 2031, 7.50% interest payable semi‑annually, conversion price C$1.83 per share.
  • Cash to investor: C$10.5 million.
  • Common shares to investor: 9,493,670 shares.
  • Investor warrants: 12,731,481 warrants (exercise C$2.16 per share, five‑year term).

• Warrants Issued on Closing:

• Loan Warrants to lenders: 18,705,577 warrants (exercise US$1.30 per share, five‑year term).

• Closing Date: Expected around January 8, 2026, subject to customary conditions.

• Liquidity Impact: Post‑closing cash balance projected at ~C$425 million, enhancing financial flexibility and supporting long‑term strategic priorities, including European medical market growth and pursuit of Adjusted EBITDA profitability.

• Advisors & Counsel:

• Exclusive financial advisor – Canaccord Genuity Corp.
• Canadian counsel – Cassels Brock & Blackwell LLP.
• U.S. counsel – Goodwin Procter LLP (loan) and Paul Hastings LLP (exchange).

Notable Quotes

• “Today, Canopy Growth moves forward from a position of strength, supported by a robust balance sheet, enhanced liquidity, extended debt maturities, and a clear strategic direction,” — Tom Stewart, CFO.
• “These Transactions enable the strategic scaling necessary to reinforce our leadership position and advance our path to sustained Adjusted EBITDA profitability,” — Luc Mongeau, CEO.