Canopy Growth Enters Into Additional Exchanges With Holders Of Notes

Canopy Growth Corporation CGC WEED has entered into an additional privately negotiated exchange agreement with a holder of the company's outstanding 4.25% unsecured senior notes due 2023, to acquire approximately CA$7.25 million ($5.6 million) aggregate principal amount of the notes from the noteholders in exchange for common shares of the company and approximately CA$140,000 ($110,000) in cash for accrued and unpaid interest.

Transaction Details

In accordance with the terms of the exchange agreement, Canopy Growth has agreed to acquire the notes from the noteholder for an aggregate purchase price of CA$7.17 million (approximately $5.5 million), which will be payable in such number of Canopy shares as is equal to the purchase price divided by the volume-weighted average trading price (the "VWAP") of the Canopy shares on the Nasdaq Global Select Market for the 10 consecutive trading days beginning on, and including, June 30, 2022, subject to a floor price of $2.50 and a maximum price equal to $3.50, which is the closing price of the Canopy shares on the Nasdaq on June 29, 2022.

The share consideration will be satisfied by the issuance of Canopy shares in up to two tranches as follows: on the initial closing, 1.59 million Canopy shares will be issued to the noteholder; and in the event that the averaging price calculated over the averaging period is less than the market price, on or about July 18, 2022, up to such number of Canopy shares as is equal to the excess of the purchase price divided by the averaging price over the initial closing shares.

In the event that the daily VWAP of the Canopy shares on the Nasdaq during the averaging period exceeds the market price, then the daily VWAP for such trading day will instead be deemed to be the market price; or is less than the floor price, then the daily VWAP for such trading day will instead be deemed to be the floor price, such that in no circumstances will more than 2.22 million Canopy shares be issuable pursuant to the noteholder.

Together with the exchange agreements entered into prior to the announcement, a minimum of 35.66 million Canopy shares have been or will be issued. Pursuant to the terms of the exchange agreement and the other exchange agreements, in no circumstances will more than 80.63 million Canopy shares be issuable pursuant to the transaction.

The transactions are being conducted as private placements, and any Canopy shares to be issued in the transaction will be issued pursuant to the exemption from the registration requirements of the Securities Act of 1933, as amended, afforded by Section 4(a)(2) of the Securities Act in transactions not involving any public offering.

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