Canopy Growth Corporation’s $198 Million Notes Exchange

Cassels Brock & Blackwell LLP represented Canopy Growth Corporation on the exchange agreements.

On June 29, 2022, Canopy Growth Corporation entered into privately negotiated exchange agreements with a limited number of holders of Canopy’s outstanding 4.25% unsecured senior notes due 2023 to acquire approximately C$255.4 million aggregate principal amount of the notes in exchange for common shares of Canopy and approximately C$3 million in cash for accrued and unpaid interest. The purchase price of approximately C$252.8 million will be payable in Canopy shares based on the volume-weighted average trading price of the shares on the Nasdaq for the 10 consecutive trading days beginning on, and including, June 30, 2022, subject to a floor price of US$2.50 and a maximum price equal to US$3.50.

The share consideration will be satisfied by the issuance of Canopy shares in up to two tranches as follows: (a) on the initial closing, anticipated to be June 30, 2022; and (b) in the event that the averaging price calculated over the averaging period is less than US$3.50, additional Canopy shares will be issued. Based on the floor price, in no circumstances will more than 78,404,305 Canopy shares be issuable pursuant to the transaction.

A subsidiary of Constellation Brands, Inc. is participating in the transaction and will acquire a minimum of 21,929,914 Canopy shares and up to 30,701,880 Canopy shares solely on the final closing and based on the averaging price calculated over the averaging period. Constellation currently holds approximately 35.3% of the issued and outstanding Canopy shares on a non-diluted basis.

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.

The Cassels’ team was led by Jonathan Sherman (Picture), assisted by Jamie Litchen, Tayyaba Khan, Jeffrey Roy, Thea Gaertner, Charles Rich, Daniel Cipollone, Zahra Nurmohamed, Tera Li Parizeau and Golsa Hashemi-Ghochani. 

Involved fees earner: Daniel Cipollone – Cassels Brock & Blackwell LLP; Thea Gaertner – Cassels Brock & Blackwell LLP; Tayyaba Khan – Cassels Brock & Blackwell LLP; Jamie Litchen – Cassels Brock & Blackwell LLP; Zahra Nurmohamed – Cassels Brock & Blackwell LLP; Tera Li Parizeau – Cassels Brock & Blackwell LLP; Charles Rich – Cassels Brock & Blackwell LLP; Jeffrey Roy – Cassels Brock & Blackwell LLP; Jonathan Sherman – Cassels Brock & Blackwell LLP;

Law Firms: Cassels Brock & Blackwell LLP;

Clients: Canopy Growth Corp.;

Sonia Carcano

Author: Sonia Carcano