Canadian cannabis producer Canopy Growth raising $25 million

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Canadian cannabis producer Canopy Growth Corp. entered into subscription agreements with institutional investors in a private placement offering for gross proceeds of approximately $25 million (33.8 million Canadian dollars).

The offering of roughly 22.9 million units occurred at a price per unit of $1.09, an approximately 22% discount from Friday’s close, according to a Monday news release.

Smiths Falls, Ontario-based Canopy said the investors hold an over-allotment option allowing them to acquire up to about 22.9 more units.

The gross proceeds from the over-allotment option would be another $25 million

The over-allotment option is valid through Nov. 2.

The capital is expected to be used for working capital and other general corporate purposes, the company said.

The units comprise one common share and one purchase warrant.

Each warrant entitles the investor to acquire one share from the company for $1.35 for a period of five years from the date of issuance.

The closing of the private placement, but not the over-allotment option, is expected to happen Sept. 19.

Canopy shares are traded on Toronto Stock Exchange and Nasdaq.