ACQUISITION OF OPTION TO MAINTAIN PRO RATA
OWNERSHIP INTEREST OF APPROXIMATELY 20% FOLLOWING TERRASCEND
FINANCING
SMITHS FALLS, ON, Jan. 14, 2021 /PRNewswire/ - Canopy Growth
Corporation ("Canopy Growth" or the "Company") (TSX:
WEED) (NASDAQ: CGC) today announced that the Company has filed an
early warning report under National Instrument 62-103 in connection
with the acquisition of an option (the "Option") to purchase
1,072,450 common shares (the "Common Shares") of
TerrAscend Corp. ("TerrAscend"), conditional upon the
occurrence or waiver of amendments to federal laws of the United States to permit the general
cultivation, distribution and possession of marijuana (as defined
in 21 U.S.C 802) or to remove the regulation of such activities
from the federal laws of the United
States (the "Triggering Event"). Upon the occurrence
or waiver of the Triggering Event, the Company may exercise the
Option and pay the balance of the purchase price in order to
acquire the Common Shares subject to the Option.
On January 13, 2021, the Company
entered into an agreement with an existing shareholder of
TerrAscend to acquire the Option for aggregate consideration of
approximately US$10.5 million. The
acquisition of the Option resulted in an increase in the Company's
interest in the Common Shares of approximately 0.7% on a partially
diluted basis. In addition, since the previous early warning report
filed by the Company, the Company has acquired beneficial
ownership, control or direction over 22,474,130 Common Share
purchase warrants (together with the acquisition of the Option, the
"Acquisitions"), representing an increase in the Company's
interest in the Common Shares of approximately 10.9% on a partially
diluted basis.
Immediately prior to the Acquisitions, the Company beneficially
owned, and exercised control or direction over, 38,890,570
exchangeable shares (the "Exchangeable Shares") of
TerrAscend, representing 100% of the issued and outstanding
Exchangeable Shares on a non-diluted basis and approximately 29% of
the issued and outstanding Common Shares on a partially-diluted
basis, assuming the conversion of the Exchangeable Shares into
Common Shares following the occurrence or waiver of the Triggering
Event.
Immediately following the Acquisitions, the Company beneficially
owns, and exercises control or direction over, 38,890,570
Exchangeable Shares, an aggregate of
22,474,130 Common Share purchase warrants and is deemed
to own an aggregate of 1,072,450 Common Shares that are subject to
the Option, representing 100% of the issued and outstanding
Exchangeable Shares on a non-diluted basis and approximately 39.9%
of the issued and outstanding Common Shares on a partially-diluted
basis, assuming the conversion of the Exchangeable Shares into
Common Shares and the exercise of the warrants and the Option held
by the Company.
Assuming the conversion of all proportionate voting shares of
TerrAscend and the Exchangeable Shares into Common Shares and the
exercise of the warrants and the Option held by the Company
following the occurrence or waiver of the Triggering Event, the
Company would beneficially own, and exercise control or direction
over approximately 26.8% of the issued and outstanding Common
Shares.
While the Company currently has no immediate plans or intentions
with respect to the securities of TerrAscend, depending on
regulatory changes, market conditions, general economic and
industry conditions, trading prices, TerrAscend's business,
financial condition and prospects and/or other relevant factors,
the Company may develop such plans or intentions in the future and,
at such time, may from time to time acquire additional securities,
dispose of some or all of the existing or additional securities or
may continue to hold the securities of TerrAscend.
A copy of the early warning report filed by the Company will be
available under TerrAscend's profile on SEDAR at www.sedar.com or
by contacting the Company at 855 558-9333. The Company's head
office is located at 1 Hershey Drive, Smith Falls, Ontario, K7A 0A8 and TerrAscend's head office
is located at P.O. Box 43125, Mississauga, Ontario L5B 4A7.
About Canopy Growth
Canopy Growth (TSX:WEED, NASDAQ:CGC) is a world-leading
diversified cannabis and cannabinoid-based consumer product
company, driven by a passion to improve lives, end prohibition, and
strengthen communities by unleashing the full potential of
cannabis. Leveraging consumer insights and innovation, we offer
product varieties in high quality dried flower, oil, softgel
capsule, infused beverage, edible, and topical formats, as well as
vaporizer devices by Canopy Growth and industry-leader Storz &
Bickel. Our global medical brand, Spectrum Therapeutics, sells a
range of full-spectrum products using its colour-coded
classification system and is a market leader in
both Canada and Germany. Through our award-winning
Tweed and Tokyo Smoke banners, we reach our adult-use consumers and
have built a loyal following by focusing on top quality products
and meaningful customer relationships. Canopy Growth has entered
into the health and wellness consumer space in key markets
including Canada, the United States,
and Europe through BioSteel sports nutrition, and This
Works skin and sleep solutions; and has introduced additional
federally-permissible CBD products to the United
States through our First & Free and Martha Stewart CBD
brands. Canopy Growth has an established partnership with Fortune
500 alcohol leader Constellation Brands. For more information
visit www.canopygrowth.com.
Notice Regarding Forward Looking Statements
This press release contains "forward-looking statements" and
"forward-looking information" within the meaning of applicable U.S.
and Canadian securities laws (collectively, "forward-looking
statements"), which involve certain known and unknown risks and
uncertainties. Forward-looking statements predict or describe our
future operations, business plans, business and investment
strategies and the performance of our investments. These
forward-looking statements are generally identified by their use of
such terms and phrases as "intend," "goal," "strategy," "estimate,"
"expect," "project," "projections," "forecasts," "plans," "seeks,"
"anticipates," "potential," "proposed," "will," "should," "could,"
"would," "may," "likely," "designed to," "foreseeable future,"
"believe," "scheduled" and other similar expressions. You are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date the statement was made.
Forward–looking statements are necessarily based upon a number of
estimates and assumptions that, while considered reasonable by
management, are inherently subject to significant business,
economic and competitive risks, financial results, results,
performance or achievements expressed or implied by those
forward–looking statements and the forward-looking statements are
not guarantees of future performance. Accordingly, there are or
will be important factors that could cause actual outcomes or
results to differ materially from those indicated in these
statements. A discussion of some of the material factors applicable
to Canopy Growth can be found under the section entitled "Risk
Factors" in Canopy Growth's Annual Report on Form 10-K for the year
ended March 31, 2020, filed with the Securities and Exchange
Commission and with applicable Canadian securities regulators, as
such factors may be further updated from time to time in its
periodic filings with the Securities and Exchange Commission and
with applicable Canadian securities regulators, which can be
accessed at www.sec.gov/edgar and www.sedar.com,
respectively. These factors should not be construed as exhaustive
and should be read in conjunction with the other cautionary
statements that are included in this press release and in the
filings. Any forward–looking statement included in this press
release is made as of the date of this press release and, except as
required by law, Canopy Growth disclaims any obligation to update
or revise any forward-looking statement. Readers are cautioned not
to put undue reliance on any forward-looking statement.
Forward-looking statements contained in this press release are
expressly qualified by this cautionary statement.
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SOURCE Canopy Growth Corporation