Canopy Growth completes US$20
million loan to Arise Bioscience Inc.
SMITHS FALLS and TORONTO, ON, Dec. 10,
2020 /CNW/ - Canopy Growth Corporation ("Canopy Growth"
or the "Company") (TSX: WEED) (NASDAQ: CGC) and Arise Bioscience
Inc. ("Arise"), a wholly owned subsidiary of TerrAscend Corp.
("TerrAscend") (CSE: TER) (OTCQX: TRSSF) engaged only in the legal
sale of CBD products, today announced they have entered into a loan
financing arrangement in the amount of US$20
million (the "Loan") pursuant to a secured debenture (the
"Debenture"). In connection with the Loan, TerrAscend has issued
2,105,718 common share purchase warrants to the Company (the
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
Subsequently, in March 2020, Canopy
Growth loaned CAD $80.5 million to
TerrAscend Canada Inc.
"TerrAscend's management continues to perform very well
in high-growth, competitive markets. With this additional
loan into TerrAscend's Arise business unit, we are confident the
team will continue to execute at a high level and that they are
well positioned to drive strong value creation for Canopy
shareholders," said David Klein,
CEO, Canopy Growth.
Jason Ackerman, Chief Executive
Officer and Executive Chairman of TerrAscend, added, "I'd like to
thank the Canopy Growth team for their ongoing support and
investment as we scale our operations. I'm proud to consider them
partners and look forward to continuing to execute on the
Use of Proceeds
Arise is only engaged in the legal sale of CBD products and does
not sell THC products. The Loan proceeds are expected to be used by
Arise for general corporate purposes, the repayment of indebtedness
and/or for other permitted purposes under the terms of the
Debenture. The funds will not 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.
The Debenture will bear interest at a rate of 6.10% per annum
and will mature on December 9, 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 Arise beginning in the fourth year after
issuance of the Debenture. The Debenture is secured by the assets
of Arise, is not convertible, and is not guaranteed by TerrAscend.
The Warrants are comprised of: (a) 1,926,983 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 CAD $15.28 per share; and (b) 178,735 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 CAD $17.19 per share. 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
and the Loan is repayable by Arise at anytime. The First Tranche
Warrants expire on December 9, 2030
or such earlier date in accordance with the First Tranche Warrants
and the Second Tranche Warrants expire on December 9, 2031 or such earlier date in
accordance with the Second Tranche Warrants.
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.
TerrAscend is a leading North American cannabis operator with
vertically integrated operations in Pennsylvania, New
Jersey, and California in
addition to operating as a licensed producer in Canada. TerrAscend operates an award-winning
chain of Apothecarium dispensary retail locations as well as scaled
cultivation, processing and manufacturing facilities on both the
East and West coasts. TerrAscend's best-in-class cultivation and
manufacturing practices yield consistent, high-quality cannabis,
providing industry-leading product selection to both the medical
and legal adult-use market. The Company owns a number of
synergistic businesses and brands, including The Apothecarium,
Ilera Healthcare, State Flower, Valhalla Confections, and Arise
Bioscience Inc. For more information, visit www.terrascend.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 Corporation ("Canopy") can be found under the
section entitled "Risk Factors" in Canopy'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 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