Canopy Growth Announces $250M At-The-Market Equity Program

Zinger Key Points
  • Canopy established an at-the-market equity program to issue and sell up to $250 million worth of its common shares.
  • Canopy will use the proceeds from the offering to support its existing businesses and to fund potential acquisitions in the future and more.

Canopy Growth Corporation CGC announced on Thursday that it has established an at-the-market equity program under which it can issue and sell up to $250 million worth of its common shares from treasury from time to time in concurrent public offerings in the United States and Canada.

What Happened

The Canadian cannabis giant said that any of its common shares sold in the ATM program will be sold in transactions made directly on the Nasdaq or the TSX or on any other available U.S. or Canadian trading market. Canopy will set the volume and timing of sales under the program, with the common shares being distributed at market prices prevailing at the time of each sale or certain other prices.

The company has entered into an equity distribution agreement in connection with the ATP program, with BMO Nesbitt Burns Inc., which will serve as a Canadian agent and BMO Capital Markets Corp., as a U.S. agent.

The offering is qualified by a prospectus supplement dated June 6, 2024 to the company’s Canadian short-form base shelf prospectus dated June 5, 2024.

See also: Piper Sandler Maintains Underweight On Canopy Growth Stock, Calls Cannabis Rescheduling ‘Largely Symbolic’

Why It Matters

Canopy plans to utilize the proceeds to support its existing businesses and to fund potential acquisitions in the future as well as for working capital and general corporate purposes.

The move comes on the heels of Canopy's announcement that had exercised. the option to acquire all of the issued and outstanding Class E subordinate voting shares of Acreage Holdings, Inc. ACRG ACRG.B.U))) ACRHF ACRDF))). Canopy is in the process of acquiring Acreage through its U.S. subsidiary, Canopy USA. The two companies first entered an agreement nearly five years ago, in 2019. The two-stage acquisition deal is expected to close in the first half of 2025, subject to various conditions and regulatory approvals.

Now read: Acreage Announces $10M Private Placement Of Units Ahead Of Acquisition By Canopy

CGC Price Action

Canopy's shares traded 4.48% lower at $7.46 per share during the pre-market session on Thursday morning.

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