New financing establishes Canopy Growth as the only cannabis
company with multiple financings from a commercial lending
institution.
SMITHS FALLS, ON, Aug. 5, 2016 /CNW Telbec/ - Canopy Growth
Corporation (TSX: CGC) ("Canopy Growth" or "the Corporation")
closed a $5.5 million financing with
a commercial lending institution. The two facilities, which
will be used to refinance building construction and for
expenditures related to the purchase of capital equipment, is the
second financing agreement that the institution has entered into
with Canopy Growth. The three facilities total approximately
$7 million.
"These new facilities strengthen our financial position and
enable Canopy Growth to continue driving forward an aggressive
expansion of our operations that we believe is necessary to help
meet future cannabis market demand," said Bruce Linton, Chairman & CEO, Canopy Growth.
"We are very pleased with this second round of financing seeing as
it is the first time that the commercial lender has entered into
multiple credit agreements with a Licensed Producer. We believe it
signals a strong belief in the strength of Canopy Growth's current
and future potential business."
The new financing is comprised of two separate loan facilities:
a term loan and a revolving line of credit. The 5 year term loan is
for approximately $3.5 million and is
provided on commercial terms. The revolving loan, in the
amount of $2.0 million, bears a
variable interest rate based on the CIBC prime rate with a 5 year
term and interest only payments.
The financing is secured by a first charge mortgage on the Tweed
Farms property, a first position on a Tweed Farms general security
agreement and a specific security interest, backed by a corporate
guaranty from Canopy Growth.
Bruce Linton commented,
"Management believes it is appropriate and necessary to fund
continued investment in our business in order to capitalize on
Canadian and international opportunities in a timely fashion all
the while considering the potential impact of key future
developments in our sector, including pending changes to the
Marihuana for Medical Purposes Regulations (MMPR) in
response to the Allard decision which are expected to be introduced
by August 24, 2016, the tabling of
recommendations by the Federal Government's Marijuana Legalization
Task Force which is expected in November
2016 and the introduction of marijuana legalization
legislation which is expected to happen by the spring of 2017."
The first regulatory change on the horizon is expected this
month when the Canadian government is likely to announce changes to
the MMPR in response to the decision rendered on February 24, 2016 by the Federal Court in the
case of Allard et al v. Canada. The Company believes
that the legislative changes are likely to result in the government
permitting patients to grow medical marijuana for their own use.
While such changes may result in a material adverse change to the
Company and sector, Canopy remains committed to an expansion of
capacity that appropriately invests in the future of the cannabis
sector.
About Canopy Growth
Corporation
Canopy Growth is a
world-leading diversified cannabis company, offering diverse brands
and curated cannabis strain varieties in dried and oil extract
forms. Through its wholly-owned subsidiaries, Tweed, Tweed
Farms, and Bedrocan Canada, Canopy Growth operates three
state-of-the-art production facilities with over half a million
square feet of indoor and greenhouse production capacity.
Canopy Growth has established partnerships with leading sector
names in Canada and abroad.
For more information, www.canopygrowth.com.
Notice Regarding Forward Looking
Statements
This news
release contains forward-looking statements. Often, but not always,
forward-looking statements 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 involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or
achievements of Canopy Growth Corporation, Tweed Inc., Tweed Farms
Inc. or Bedrocan Canada Inc. to be materially different from any
future results, performance or achievements expressed or implied by
the forward-looking statements. Examples of such statements include
future operational and production capacity, the impact of enhanced
infrastructure and production capabilities, and forecasted
available product selection. The forward-looking statements
included in this news release are made as of the date of this news
release and Canopy Growth Corp. does not undertake an obligation to
publicly update such forward-looking statements to reflect new
information, subsequent events or otherwise unless required by
applicable securities legislation. Neither TSX Exchange nor its
Regulation Services Provider (as that term is defined in policies
of the TSX Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE Canopy Growth Corporation