Cannabis producer Canopy Growth raised gross proceeds of roughly $50 million (68 million Canadian dollars) through an exchange and subscription agreement with an institutional investor.
Canopy said in a Friday news release that it intends to use the net proceeds for working capital and general corporate purposes.
The Smiths Falls, Ontario-based business also said it plans to exchange approximately CA$27.5 million of existing debt, which matures in September 2025, for a new senior unsecured convertible debenture that matures in five years.
Under the deal, the unidentified investor will acquire the convertible debenture in an aggregate principal amount equal to CA$96,358,375.
Canopy will issue to the investor an additional 3,350,430 common share purchase warrants.
Each warrant entitles the holder to acquire a common share at an exercise price of CA$16.18 for a period of five years.
The convertible debenture bears interest at a rate of 7.5% per year.
The debenture will be convertible into common shares at the option of the investor at a price of CA$14.38 per share. That’s the Canadian dollar equivalent of the average Nasdaq closing price of the shares for the five trading days preceding the agreement.
Canopy shares trade as CGC on the Nasdaq and WEED on the Toronto Stock Exchange.
