Canopy Growth Corporation CGC WEED and TerrAscend Canada Inc., a subsidiary of TerrAscend Corp. TER TRSSF, announced Wednesday they have signed a loan financing arrangement worth CA$80.5 million ($58.59 million) pursuant to a secured debenture.
TerrAscend issued 17.81 million common share purchase warrants to Canopy Growth as part of the deal.
TerrAscend Canada is to use the net proceeds to support its Canadian activities, its Arise Bioscience U.S. hemp division, paying back debt, international expansion and general corporate purposes.
The debenture holds interest of 6.1% per year and is set to mature in March 2030 or earlier, following the conditions of the debenture, which is secured by TerrAscend Canada’s assets.
Canopy co-invested in TerrAscend in November 2017 and restructured the transaction one year later, according to Wednesday's press release.
“TerrAscend Canada has proven its ability to thrive and this loan is a strong signal that Canopy Growth is confident in their ability to execute over the long term,” Canopy Growth CEO David Klein said in a statement.
“We are encouraged by TerrAscend’s strong performance and we view the team’s experience as an important contributor to its continued success.”
TerrAscend is entering its next stage of growth and expansion, Jason Ackerman, the company's executive chairman and interim CEO, said in a statement.
"We look forward to continuing to work with Canopy Growth as new opportunities emerge and the regulatory landscape evolves."
Canopy’s shares closed Tuesday’s market session 7.26% higher at $14.18 per share.
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