Canopy Growth Announces Closing of Previously Announced Exchange Transaction

Retirement of Approximately $263 Million of Debt Strengthens Canopy Growth’s Balance Sheet and Preserves Cash to Support Future Growth

SMITHS FALLS, ONTARIO (July 18, 2022) – Canopy Growth Corporation (“Canopy Growth” or the “Company”) (TSX: WEED) (NASDAQ: CGC) announced today that it has closed (the “Final Closing”) its previously announced exchange transaction (the “Transaction”) of certain 4.25% unsecured notes due 2023 (the “Notes”) in order to reduce its debt obligations by approximately $263 million. Constellation Brands, Inc. (“CBI”), through its wholly-owned subsidiary Greenstar Canada Investment Limited Partnership (“GCILP”), participated in the Transaction.

“As we navigate global economic and capital market headwinds, this action has enabled us to deleverage our balance sheet, preserve cash, and reduce interest payments by addressing a substantial portion of our 4.25% unsecured notes,” said Judy Hong, Chief Financial Officer at Canopy Growth. “We continue to assess all available options to further optimize our balance sheet and address the remaining 4.25% unsecured notes in advance of their maturity to ensure Canopy Growth is well positioned to continue investing in the highest potential areas of our business to drive future growth.”

Pursuant to the terms and conditions of the Transaction, Canopy Growth acquired and cancelled approximately $263 million (approximately USD$203.6 million) aggregate principal amount of its outstanding Notes from a limited number of holders (the “Noteholders”), including GCILP, a subsidiary of CBI, for an aggregate purchase price (excluding accrued and unpaid interest in the amount of approximately $5.4 million (approximately USD$4.2 million), which was paid in cash) of $260 million (approximately USD$201.6 million) (the “Purchase Price”) payable in common shares of the Company (the “Canopy Shares”).

The Company satisfied the Purchase Price as follows: (a) on the initial closing, 35,662,420 Canopy Shares (the “Initial Closing Shares”) were issued to the Noteholders, other than GCILP, based on a price equal to USD$3.50 per Canopy Share, which was the closing price of the Canopy Shares on the Nasdaq Global Select Market (“Nasdaq”) on June 29, 2022; and (b) on the Final Closing 11,896,536 Canopy Shares were issued to the Noteholders, other than GCILP, based on the volume-weighted average trading price of the Canopy Shares on the Nasdaq for the 10 consecutive trading days beginning on, and including, June 30, 2022, being USD$2.6245 (the “Averaging Price”). In addition, on the Final Closing, 29,245,456 Canopy Shares were issued to GCILP based on a price per Canopy Share equal to the Averaging Price.

Pursuant to the Transaction, the Company acquired and cancelled $100 million (approximately USD$77.5 million) aggregate principal amount of the Notes held by GCILP in exchange for 29,245,456 Canopy Shares, representing approximately 6.7% of the issued and outstanding Canopy Shares on a non-diluted basis immediately prior to the Final Closing. Upon completion of the Transaction, CBI, though GCILP and CBG Holdings LLC, holds 171,499,258 Canopy Shares, representing approximately 35.7% of the issued and outstanding Canopy Shares on a non-diluted basis.

GCILP’s participation in the Transaction (the “Insider Participation”) is considered to be a “related party transaction” within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). Pursuant to Section 5.5(a) and 5.7(1)(a) of MI 61-101, the Company is exempt from obtaining a formal valuation and minority approval of the Company’s shareholders with respect to the Insider Participation as the fair market value of the Transaction is below 25% of the Company’s market capitalization as determined in accordance with MI 61-101. In addition, the Transaction was approved by the board of directors of the Company with Ms. Judy A. Schmeling, a director of CBI, Mr. Garth Hankinson, Chief Financial Officer and Executive Vice President of CBI, Mr. Robert Hanson, Executive Vice President and President – Wine & Spirits Division of CBI and Mr. James Sabia, Executive Vice President and President – Beer Division of CBI, each having disclosed their interest in the Transaction by virtue of their positions with CBI and abstaining from voting thereon. The Company did not file a material change report 21 days prior to the closing of the Transaction as the details of the Insider Participation in the Transaction had not been finalized at that time.

The Transaction was conducted as a private placement, and the Canopy Shares issued in the Transaction were issued pursuant to the exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), afforded by Section 4(a)(2) of the Securities Act in transactions not involving any public offering. This press release is neither an offer to sell nor a solicitation of an offer to buy any securities described above, nor will there be any offer, solicitation or sale of any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.


Cassels Brock & Blackwell LLP and Latham & Watkins LLP acted as legal counsel to Canopy Growth. HudsonWest LLC and BMO Capital Markets acted as financial advisors and exchange agents to Canopy Growth.

About Canopy Growth

Canopy Growth (TSX:WEED, NASDAQ:CGC) is a world-leading diversified cannabis and cannabinoid-based consumer product company, driven by a passion to improve lives, end prohibition, and strengthen communities by unleashing the full potential of cannabis. Leveraging consumer insights and innovation, Canopy Growth offers product varieties in high-quality dried flower, oil, softgel capsule, infused beverage, edible, and topical formats, as well as vaporizer devices by Canopy Growth and industry-leader Storz & Bickel. Canopy Growth’s global medical brand, Spectrum Therapeutics, sells a range of full-spectrum products using its colour-coded classification system and is a market leader in both Canada and Germany. Through Canopy Growth’s award-winning Tweed and Tokyo Smoke banners, Canopy Growth reaches its adult-use consumers and has built a loyal following by focusing on top quality products and meaningful customer relationships. Canopy Growth has entered into the health and wellness consumer space in key markets including Canada, the United States, and Europe through BioSteel sports nutrition, and This Works skin and sleep solutions; and has introduced additional hemp derived CBD products to the United States through its First & Free and Martha Stewart CBD brands. Canopy Growth has an established partnership with Fortune 500 alcohol leader Constellation Brands.

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Notice Regarding Forward-Looking Information

This news release contains “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and “forward-looking information” within the meaning of applicable Canadian securities legislation. Often, but not always, forward-looking statements and information can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “estimates”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements or information involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company or its subsidiaries to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements or information contained in this news release. Examples of such statements and uncertainties include statements with respect to the benefits of the debt repurchase and expectations for other economic, business, and/or competitive factors.

Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information, including inherent uncertainty associated with projections; expectations regarding future investment, growth and expansion of operations; regulatory and licensing risks; changes in general economic, business and political conditions, including changes in the financial and stock markets and the impacts of increased rates of inflation; legal and regulatory risks inherent in the cannabis industry, including the global regulatory landscape and enforcement related to cannabis, political risks and risks relating to regulatory change; risks relating to anti-money laundering laws; compliance with extensive government regulation and the interpretation of various laws regulations and policies; public opinion and perception of the cannabis industry; and such other risks contained in the public filings of the Company filed with Canadian securities regulators and available under the Company’s profile on SEDAR at and with the United States Securities and Exchange Commission through EDGAR at, including the Company’s annual report on Form 10-K for the year ended March 31, 2022.

In respect of the forward-looking statements and information, the Company has provided such statements and information in reliance on certain assumptions that they believe are reasonable at this time. Although the Company believes that the assumptions and factors used in preparing the forward-looking information or forward-looking statements in this news release are reasonable, undue reliance should not be placed on such information and no assurance can be given that such events will occur in the disclosed time frames or at all. Should one or more of the foregoing risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although the Company has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended. The forward-looking information and forward-looking statements included in this news release are made as of the date of this news release and the Company does not undertake any obligation to publicly update such forward-looking information or forward-looking information to reflect new information, subsequent events or otherwise unless required by applicable securities laws.