Realization of sale proceeds further strengthens Canopy Growth’s balance sheet
Completed transactions further advances Canopy Growth’s cannabis-focused, asset-light operating model
SMITHS FALLS, ON – December 1, 2023 – Canopy Growth Corporation (“Canopy Growth” or the “Company”) (TSX: WEED) (NASDAQ: CGC) today provided an update that pursuant to the proceedings under the Companies’ Creditors Arrangement Act (the “CCAA”) involving BioSteel Sports Nutrition Inc. (“BioSteel Canada”), that two sale transactions transferring the assets of BioSteel Canada and BioSteel Manufacturing, LLC (“BioSteel Manufacturing”) have been completed for aggregate gross proceeds of $30.4 million.
Pursuant to the CCAA court-ordered sale and investment solicitation process, a sale of substantially all of the assets of BioSteel Canada to the Coachwood Group as contemplated by an asset purchase agreement dated November 9, 2023, and a sale of all or substantially all of the assets of BioSteel Manufacturing to another third party as contemplated by an asset purchase agreement dated November 9, 2023, have been completed. A portion of proceeds realized from the two transactions will be used to repay debt, which is expected to further reduce interest expense.
“With the completion of these two sale transactions, we have completed another critical action to focus Canopy Growth’s business on our core cannabis operations and can now realize the proceeds of sale to further improve the Company’s balance sheet,” said Judy Hong, Chief Financial Officer, Canopy Growth. “We wish the new owners the best in the future operation of the brand and assets.”
“The BioSteel brand is loved and continues to serve professional athletes and has evolved beyond to cultivate a passionate and athletically inspired consumer base”, said Dan Crosby, the founder and CEO of the Coachwood Group, in a statement. “I am dedicated to continuing to deliver high-quality products under the BioSteel brand that everyone loves for years to come.”
About Canopy Growth
Canopy Growth is a leading North American cannabis and consumer packaged goods (“CPG”) company dedicated to unleashing the power of cannabis to improve lives. Through an unwavering commitment to our consumers, Canopy Growth delivers innovative products with a focus on premium and mainstream cannabis brands including Doja, 7ACRES, Tweed, and Deep Space. Canopy Growth’s CPG portfolio features targeted 24-hour skincare and wellness solutions from This Works, gourmet wellness products by Martha Stewart CBD, and category defining vaporizer technology made in Germany by Storz & Bickel.
Canopy Growth has also established a comprehensive ecosystem to realize the opportunities presented by the U.S. THC market through its rights to Acreage Holdings, Inc., a vertically integrated multi-state cannabis operator with principal operations in densely populated states across the Northeast, as well as Wana Brands, a leading cannabis edible brand in North America, and Jetty Extracts, a California-based producer of high-quality cannabis extracts and pioneer of clean vape technology.
Beyond our world-class products, Canopy Growth is leading the industry forward through a commitment to social equity, responsible use, and community reinvestment—pioneering a future where cannabis is understood and welcomed for its potential to help achieve greater wellbeing and life enhancement.
For more information visit www.canopygrowth.com.
References to information included on, or accessible through, our website do not constitute incorporation by reference of the information contained at or available through our website, and you should not consider such information to be part of this press release.
Notice Regarding Forward Looking Statements
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 gross proceeds of the transactions and the resulting improvements to the Company’s balance sheet.
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 BioSteel’s ability to complete the Sale Transactions; risks relating to the CCAA process, including uncertainty of any residual value for BioSteel’s stakeholders under the CCAA process; negative operating cash flow; uncertainty of additional financing; use of proceeds; volatility in the price of the Company’s common shares; 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; additional dilution; 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 www.sedar.com and with the Securities and Exchange Commission through EDGAR at www.sec.gov/edgar, including under the heading “Risk Factors” in the Company’s annual report on Form 10-K for the year ended March 31, 2023 and its subsequently filed quarterly reports on Form 10-Q.
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.