Canopy Growth holds conditional ownership of
approximately 20% in TerrAscend
SMITHS FALLS, ON, Feb. 23, 2021 /PRNewswire/ - Canopy Growth
Corporation ("Canopy Growth") (TSX: WEED) (NASDAQ: CGC) announces
that it has closed the previously announced plan of arrangement
under the Business Corporations Act (Ontario) (the "Arrangement") involving Canopy
Growth, RIV Capital Inc. (formerly Canopy Rivers Inc.) ("RIV
Capital") (TSX: RIV) (OTC: CNPOF) and its wholly-owned subsidiary,
RIV Capital Corporation (formerly Canopy Rivers Corporation)
("RCC"), as well as Canopy Growth's wholly-owned subsidiary, The
Tweed Tree Lot Inc. ("Tweed NB").
Following completion of the Arrangement, Canopy Growth now
directly holds 38,890,570 exchangeable shares (the "TerrAscend
Exchangeable Shares") in the capital of TerrAscend Corp.
("TerrAscend"), an aggregate of 22,474,130 common share purchase
warrants (the "TerrAscend Warrants") in the capital of TerrAscend
and is deemed to own an aggregate of 1,072,450 common shares of
TerrAscend (the "TerrAscend Shares") that are subject to an option
(the "TerrAscend Option") entered into on January 13, 2021.
Canopy Growth beneficially owns approximately 20% of the issued
and outstanding TerrAscend Shares on a fully-diluted basis.
The securities in the capital of TerrAscend held by Canopy Growth
are not currently convertible or exercisable and will not be
convertible or exercisable until federal laws in the United States with respect to marijuana
are amended.
"Our conditional ownership in TerrAscend is a key component of
our U.S. ecosystem strategy and strengthens our U.S. exposure ahead
of the promising cannabis reform in the U.S." said David Klein, Chief Executive Officer of Canopy
Growth. "In addition, the divestiture of our interest in RIV
Capital allows Canopy Growth to further improve our focus as an
organization."
Pursuant to the Arrangement, among other things, Canopy Growth
acquired from RCC (i) 19,445,285 TerrAscend Exchangeable Shares;
(ii) 2,225,714 TerrAscend Warrants with an exercise price of
C$5.95 per TerrAscend Share; (iii)
333,723 TerrAscend Warrants with an exercise price of C$6.49 per TerrAscend Share; (iv) a C$13.2 million loan receivable owing by
TerrAscend Canada Inc. to RCC; (v) all of the Class A preferred
shares in the capital of Les Serres Vert Cannabis Inc. ("Vert
Mirabel"); and (vi) 143 common shares in the capital of Vert
Mirabel, thereby increasing Canopy Growth's ownership of the issued
and outstanding common shares in the capital of Vert Mirabel from
approximately 41% to approximately 55%. In addition, all of the
obligations of Tweed NB owing to RCC pursuant to a royalty
agreement between the parties was terminated, providing Canopy
Growth with annual cash savings of approximately $2.9 million per year over the balance of the
24-year term of the agreement.
In exchange for the foregoing, Canopy Growth (i) surrendered
36,468,318 Class B multiple voting shares ("MVS") and 15,223,938
Class A subordinate voting shares ("SVS") in the capital of RIV
Capital; (ii) made a cash payment to RCC of approximately
C$115 million; and (iii) issued
3,647,902 Canopy Growth common shares to RCC. As a result,
following completion of the Arrangement, Canopy Growth no longer
has any equity, debt or other interest in RIV Capital, and no
longer has any representation on the RIV Capital board of
directors.
Early Warning Disclosure Regarding RIV Capital
Completion of the Arrangement resulted in a 100% decrease in
Canopy Growth's interest in the MVS on a non-diluted basis and an
approximate 27.0% decrease in Canopy Growth's interest in the SVS
on a partially diluted basis. Immediately prior to completion of
the Arrangement, Canopy Growth beneficially owned 36,468,318 MVS
and 15,223,938 SVS, representing 100% of the issued and outstanding
MVS on a non-diluted basis and approximately 27.0% of the issued
and outstanding SVS on a partially-diluted basis, assuming the
conversion of the MVS held by Canopy Growth into SVS.
Immediately following the Arrangement, Canopy Growth no longer
beneficially owns or exercises control or direction over any
securities in the capital of RIV Capital. While Canopy Growth
currently has no immediate plans or intentions with respect to the
securities of RIV Capital, depending on regulatory changes, market
conditions, general economic and industry conditions, trading
prices, RIV Capital's business, financial condition and prospects
and/or other relevant factors, Canopy Growth may develop such plans
or intentions in the future and, at such time, may from time to
time acquire additional securities of RIV Capital.
A copy of the early warning report filed by Canopy Growth with
respect to the securities of RIV Capital will be available under
RIV Capital's profile on SEDAR at www.sedar.com or by contacting
Canopy Growth at 855 558-9333. RIV Capital's head office is located
at 40 King Street West, Suite 2504, Toronto, Ontario M5H 3Y2.
Early Warning Disclosure Regarding TerrAscend
Immediately prior to completion of the Arrangement, Canopy
Growth beneficially owned, and exercised control or direction over,
38,890,570 TerrAscend Exchangeable Shares, an aggregate of
22,474,130 TerrAscend Warrants and was deemed to own an aggregate
of 1,072,450 TerrAscend Shares that are subject to the TerrAscend
Option, representing 100% of the issued and outstanding TerrAscend
Exchangeable Shares on a non-diluted basis and approximately 39.6%
of the issued and outstanding TerrAscend Shares on a
partially-diluted basis, assuming the conversion of the TerrAscend
Exchangeable Shares into TerrAscend Shares and the exercise of the
TerrAscend Warrants and the TerrAscend Option held by Canopy Growth
and RIV Capital, respectively.
The completion of the Arrangement did not result in an increase
in Canopy Growth's beneficial ownership interest in the TerrAscend
Shares on a partially diluted basis, due to Canopy Growth's prior
controlling interest in RIV Capital. However, following completion
of the Arrangement, Canopy Growth now directly owns 38,890,570
TerrAscend Exchangeable Shares and an aggregate of 22,474,130
TerrAscend Warrants and continues to be deemed to own an aggregate
of 1,072,450 TerrAscend Shares that are subject to the TerrAscend
Option.
While Canopy Growth 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,
Canopy Growth 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 Canopy Growth will
be available under TerrAscend's profile on SEDAR at www.sedar.com
or by contacting Canopy Growth at 855 558-9333. TerrAscend's head
office is located at P.O. Box 43125, Mississauga, Ontario L5B 4A7.
Canopy Growth's head office is located at 1 Hershey Drive, Smith
Falls, Ontario, K7A 0A8
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 cautionary statement.
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SOURCE Canopy Growth Corporation