Canopy Growth completes C$80.5
million loan to TerrAscend Canada Inc.
SMITHS FALLS, ON, March 11, 2020 /CNW/ - Canopy Growth
Corporation ("Canopy Growth" or the "Company") (TSX:WEED, NYSE:CGC)
and TerrAscend Canada Inc. ("TerrAscend Canada"), a wholly owned
subsidiary of TerrAscend Corp. ("TerrAscend") (CSE:TER, OTCQX:
TRSSF), today announced they have entered into a loan financing
arrangement in the amount of C$80.5
million (the "Loan") pursuant to a secured debenture (the
"Debenture"). In connection with the Loan, TerrAscend has issued
17,808,975 common share purchase warrants to the Company (the
"Warrants").
Canopy Growth initially co-invested in TerrAscend in
November 2017. On November 30, 2018, Canopy Growth announced the
completion of a restructuring transaction with TerrAscend pursuant
to which TerrAscend restructured its share capital by way of a plan
of arrangement under the Business Corporations
Act (Ontario).
"TerrAscend Canada has proven its ability to
thrive and this loan is a strong signal that Canopy Growth is
confident in their ability to execute over the long term," said
David Klein, CEO, Canopy Growth. "We
are encouraged by TerrAscend's strong performance and we
view the team's experience as an important contributor to its
continued success."
"We are pleased to receive this loan from Canopy Growth as we
enter into the next stage of TerrAscend's growth and expansion,"
said Jason Ackerman, Executive
Chairman and Interim CEO. "We look forward to continuing to work
with Canopy Growth as new opportunities emerge and the regulatory
landscape evolves."
Use of Proceeds
The net proceeds are expected to be used by TerrAscend Canada
for general corporate purposes and the funding of its Canadian
operations, its Arise Bioscience U.S. hemp division, international
expansion and the repayment of indebtedness. The funds cannot be
used, directly or indirectly, in connection with or for any
cannabis or cannabis-related operations in the United States, unless and until such
operations comply with all applicable laws of the United States.
Transaction Overview
The Debenture will bear interest at a rate of 6.10% per annum
and will mature on March 10, 2030 or
such earlier date in accordance with the terms of the Debenture and
all interest payments made pursuant to the Debenture are payable in
cash by TerrAscend Canada. The Debenture is secured by the assets
of TerrAscend Canada, is not convertible and is not guaranteed by
TerrAscend. The Warrants are comprised of 15,656,242 common share
purchase warrants (the "First Tranche Warrants") with each First
Tranche Warrant entitling Canopy Growth to acquire one common share
of TerrAscend at an exercise price of $5.14 per share, subject to adjustment in certain
events and 2,152,733 common share purchase warrants (the "Second
Tranche Warrants") with each Second Tranche Warrant entitling
Canopy Growth to acquire one common share of TerrAscend at an
exercise price of $3.74 per share,
subject to adjustments in certain events. The Warrants will be
exercisable by Canopy Growth following changes in U.S. federal laws
permitting the cultivation, distribution and possession of
marijuana or to remove the regulation of such activities from the
federal laws of the United States.
The First Tranche Warrants expire on March
10, 2030 or such earlier date in accordance with the First
Tranche Warrants and the Second Tranche Warrants expire on
March 10, 2031 or such earlier date
in accordance with the Second Tranche Warrants.
About Canopy Growth Corporation
Canopy Growth (TSX:WEED, NYSE:CGC) is a world-leading diversified
cannabis, hemp and cannabis device company, offering distinct
brands and curated cannabis varieties in dried, oil and Softgel
capsule forms, as well as medical devices through Canopy Growth's
subsidiary, Storz & Bickel GMbH & Co. KG. From product and
process innovation to market execution, Canopy Growth is driven by
a passion for leadership and a commitment to building a world-class
cannabis company one product, site and country at a time. Canopy
Growth has operations in over a dozen countries across five
continents.
Canopy Growth's medical division, Spectrum Therapeutics, is
proudly dedicated to educating healthcare practitioners, conducting
robust clinical research, and furthering the public's understanding
of cannabis, and has devoted millions of dollars toward
cutting-edge, commercializable research and IP development.
Spectrum Therapeutics sells a range of full-spectrum products using
its colour-coded classification Spectrum system as well as single
cannabinoid Dronabinol under the brand Bionorica Ethics.
Canopy Growth operates retail stores across Canada under its award-winning Tweed and Tokyo
Smoke banners. Tweed is a globally recognized cannabis brand which
has built a large and loyal following by focusing on quality
products and meaningful customer relationships.
From our historic public listing on the Toronto Stock Exchange
and New York Stock Exchange to our continued international
expansion, pride in advancing shareholder value through leadership
is engrained in all we do at Canopy Growth. Canopy Growth has
established partnerships with leading sector names including
cannabis icons Snoop Dogg and Seth
Rogen, breeding legends DNA Genetics and Green House Seeds,
and Fortune 500 alcohol leader Constellation Brands, to name but a
few. Canopy Growth operates eleven licensed cannabis production
sites with over 10.5 million square feet of production capacity,
including over one million square feet of GMP certified production
space. For more information visit www.canopygrowth.com
Notice Regarding Forward Looking Statements
This news
release contains "forward-looking statements" within the meaning of
the United States Private Securities Litigation Reform Act of 1995
and "forward-looking information" within the meaning of applicable
Canadian securities legislation. Often, but not always,
forward-looking statements and information can be identified by the
use of words such as "plans", "expects" or "does not expect", "is
expected", "estimates", "intends", "anticipates" or "does not
anticipate", or "believes", or variations of such words and phrases
or state that certain actions, events or results "may", "could",
"would", "might" or "will" be taken, occur or be achieved.
Forward-looking statements or information involve known and unknown
risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the Company or its
subsidiaries to be materially different from any future results,
performance or achievements expressed or implied by the
forward-looking statements or information contained in this news
release. Examples of such statements include statements with
respect to the use of proceeds, management's belief of TerrAscend's
ability over the long term and the expectation that the Loan will
enable TerrAscend to fund and execute on its Canadian, U.S. hemp
and international businesses. Risks, uncertainties and other
factors involved with forward-looking information could cause
actual events, results, performance, prospects and opportunities to
differ materially from those expressed or implied by such
forward-looking information, including regulatory and licensing
risks, the ability of the Company to exercise the Warrants and the
occurrence of changes in U.S. federal laws regarding the
cultivation, distribution or possession of marijuana, changes in
the use of proceeds, changes in general economic, business and
political conditions, including changes in the financial and stock
markets, the global regulatory landscape and enforcement related to
cannabis, including political risks and risks relating to
regulatory change, risks relating to anti-money laundering laws,
compliance with extensive government regulation and the
interpretation of various laws, regulations and policies, risk
associated with divesting certain of investments, public opinion
and perception of the cannabis industry, and such risks contained
in the public filings of the Company filed with Canadian securities
regulators and available on the issuer profile of the Company
on SEDAR at www.sedar.com, including the Company's annual
information form dated June 25, 2019.
Although the Company believes that the assumptions and factors used
in preparing the forward-looking information or forward-looking
statements in this news release are reasonable, undue reliance
should not be placed on such information and no assurance can be
given that such events will occur in the disclosed time frames or
at all. The forward-looking information and forward-looking
statements included in this news release are made as of the date of
this news release and the Company does not undertake any obligation
to publicly update such forward-looking information or
forward-looking information to reflect new information, subsequent
events or otherwise unless required by applicable securities
laws.
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SOURCE Canopy Growth Corporation